Cross-border payments company Wise has suspended transfers in Ghana's cedi currency after a rapid appreciation against the dollar this week made it costlier to move money to the West African country, a Wise spokesperson told Reuters on Friday.
The cedi is up 47 per cent this week against the dollar, Refinitiv Eikon data showed - a record appreciation for a currency that only last week had been among the year's worst performers. It is down 29 per cent since the beginning of January as of Friday's close.
Ghana, once considered a rising star among emerging market economies, is today facing a generational debt crisis. Inflation was above 50 per cent in November, and the central bank has hiked its main lending rate by 12.5 per centage points this year.
On Tuesday, Ghana and the International Monetary Fund announced a staff-level agreement for a $3 billion relief programme, which Reuters first reported late last week.
A spokesperson for London-based Wise said that cedi functions, which were suspended Thursday, would be restored "as soon as the situation has stabilised" and that only a small number of transfers were affected.
Some Ghanaian users are feeling the pinch.
Since his return in January from a three-year stint in Slovenia, environmental scientist Gyengne Francis has used Wise to tap his euro savings and now cannot access the money he uses to sustain himself while in Ghana.
"If nothing happens in two weeks, I will have to start taking out loans, and that would be devastating for me," he said.
Andrews Akoto, Head of Trading at Absa Bank Ghana, said that while the IMF announcement may have triggered this week's volatility, foreign currency demand may not pick up until corporate clients return from holiday breaks next month.
"That said... we’ve seen the central bank buy dollars from the open market to shore up its reserves," Akoto said. "This is likely to introduce some resistance to the cedi rally."