The effects of a currency's decline in value relative to the US dollar can go well beyond the foreign exchange market.
A weakened currency can potentially increase the cost of daily family and business spending for countries in Africa that rely largely on imports.
A recent reminder of such pressure was experienced in Ghana last week.
On the 20th of August, Reuters reported that the cedi had dropped to GH¢11.00 per dollar from GH¢10.90 a week earlier due to an excess of demand for dollars from offshore investors and local businesses.
With a recent Bank of Ghana auction drawing $399 million in bids versus a $125 million allotment, the weakening coincides with the continued high demand for foreign currency.
