The cedi is the official currency of Ghana. The Ghana Cedi, introduced in 2007, is the latest in a line of currencies also named the cedi. The first cedi was introduced to decimalize the Ghana currency system with a hundredth subunit called the pesewa, although no pesewa-denominated coins or banknotes are now circulated. The word cedi derives from the Akan language as a translation of cowry shell. Cowry shells were once used as currency in Ghana before coins and banknotes were introduced. The symbol for the cedi, an upper case C with a near-vertical line through it, is similar to the symbols for the colon and the cent, but it is distinct from both. Ghana Cedi is issued by the Bank of Ghana, the nation’s central bank.
The Bank of Ghana was established two days before the country’s independence was officially granted by British Parliament in 1957. The original duties of the bank were to issue and redeem currency, maintain foreign reserves and help ensure monetary stability in the new country. The first currency issued by the Bank of Ghana was the Ghana pound. This currency was based on the old English shilling and pence subdivisions and was replaced in 1965 with cedi for the primary purpose of decimalisation. The first Ghana cedi was introduced at a rate of 2.4 cedi: 1 pound.
In 1967, the first cedi was replaced with the second cedi at a rate of 1 new cedi: 1.2 old cedi. The official reason for the new currency was to more harmoniously convert between the cedi and the pound sterling since two second cedi equalled exactly one GBP. However, it is argued that a secondary reason for converting to a new cedi was to offer an opportunity to remove the image of Kwame Nkrumah, the first President of Ghana from coins and banknotes. The second cedi maintained a peg to the pound sterling for only a matter of months before it was devalued. Future attempts at maintaining the currency were through pegs to the U.S. dollar, but these were all short-lived.
Inflation in Ghana continued to run rampant, and a third cedi was introduced in 2007. At the time, Ghana had the worst inflation of any African country. When the third cedi was introduced, it was valued at a rate of 1 third cedi: 10,000 second cedi. The official name of the current currency includes the country name, as the Ghana Cedi, to distinguish it from the cedi, which represents the second cedi. Along the same line, GH₵ represents the new Ghana Cedi while ₵ alone represents the old cedi.