The Ghana cedi has experienced renewed depreciation in recent weeks as demand for foreign exchange continues to outstrip supply in the market.
According to some media reports, data gathered from major commercial banks indicates sustained pressure on the local currency over the past two weeks, with businesses seeking more US dollars than the market has been able to provide.
Some market participants have attributed the pressure to increased foreign exchange demand from players in the energy sector, who require dollars to finance crude oil imports, procure finished petroleum products and make payments to power producers.
Others have cited insufficient dollar supply to meet the growing demand from businesses. One market player, said, “We don’t think that anything has changed.”
The reports also indicated that some businesses are positioning themselves to protect their investments amid concerns that tensions in the Middle East could place additional pressure on the cedi.
According to the reports, the Bank of Ghana increased its weekly foreign exchange auction to $220 million last week. However, demand continued to exceed supply, with approximately $201 million in bids remaining unmet during Thursday’s spot auction.
Market data showed that the cedi depreciated by 0.60 per cent during the week, bringing its month-to-date depreciation to 1.86 per cent. From the beginning of the year to date, the local currency has depreciated by 8.89 per cent.
The latest development follows the cedi’s first monthly appreciation in 2026, when it gained 3.30 per cent against the US dollar in June.
The June appreciation was attributed to increased interventions by the Bank of Ghana, which injected $2.01 billion into the foreign exchange market to meet demand and support exchange rate stability.
According to the reports, the central bank sold $1.2 billion through its Forex Intermediation Programme, with auctions held twice weekly throughout June.
Although the amount met the Bank’s monthly intervention target, commercial banks reportedly submitted bids totaling $3.42 billion, reflecting strong demand for foreign exchange.
Meanwhile, the Bank of Ghana has maintained that businesses have no reason to panic, describing the recent pressure on the cedi as temporary market movements.
Officials of the central bank have stated that the Bank remains in a strong position to support the foreign exchange market when necessary and ensure that critical imports are not disrupted.
Recent data from the Bank of Ghana shows that Ghana’s international reserves have exceeded $14 billion.
The central bank also expects improved foreign exchange inflows in the coming months, including stronger remittance inflows and support from development partners.
According to the Bank, expected inflows under the International Monetary Fund (IMF) programme, including approximately $380 million in programme support and a further $240 million anticipated in July 2026 are expected to strengthen the country’s international reserves.
The Bank of Ghana also expressed optimism that improved investor confidence following Ghana’s Fitch credit rating upgrade and the government’s early Eurobond repayment decision would support the economy.
However, the central bank cautioned that uncertainties surrounding the peace process in the Middle East remain a risk, noting that any escalation could affect global crude oil prices and increase demand for US dollars.
The Bank of Ghana said it will continue to monitor developments in the foreign exchange market and implement measures aimed at maintaining stability.
SOURCE: Joy Business