Ghana Cedi Loses 8.89% in 2026 as Dollar Demand Outstrips Market Supply
- The Ghana cedi has depreciated 8.89% from January as businesses struggle to secure enough foreign exchange from the market
- Energy sector players seeking dollars to finance crude oil imports and payments to power producers are among those driving the pressure
- The Bank of Ghana raised its weekly forex auction to $220 million last week but still left $201 million in bids unmet at Thursday's spot auction
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The Ghana cedi is under renewed strain as persistent demand for foreign exchange from businesses continues to exceed what the market can supply.
The pressure has intensified over the past two weeks, with the cedi depreciating 0.60% during the most recent trading week alone.
Source: Getty Images
Joy News reported that this brings the month-to-date depreciation to 1.86% and the year-to-date figure to 8.89% since January.
Market participants have pointed to several factors behind the sustained pressure. Energy sector companies seeking foreign exchange to cover crude oil imports, finished petroleum products and outstanding payments to power producers are among the key drivers of demand.
Others attribute the challenge primarily to insufficient dollar supply relative to what businesses require.
There are also signs that some businesses are taking protective positions amid concerns that ongoing tensions in the Middle East could intensify pressure on the cedi by pushing up global crude oil prices and increasing demand for dollars.
To ease the squeeze, the Bank of Ghana raised its weekly foreign exchange auction to $220 million last week.
Despite the intervention, demand remained considerably stronger, with approximately $201 million in bids going unmet at Thursday's spot auction.
The renewed depreciation represents a reversal of the cedi's only monthly gain so far this year.
In June, the currency appreciated 3.30% against the US dollar, largely on the back of substantial central bank support.
The Bank of Ghana injected $2.01 billion into the foreign exchange market that month through its Forex Intermediation Programme, conducting auctions twice weekly. Even then, commercial banks submitted bids totalling $3.42 billion against that supply, underlining the scale of underlying demand.
Bank of Ghana Urges Calm
The central bank has sought to reassure businesses, describing the recent depreciation as temporary market movements and maintaining that it has sufficient capacity to support the market when required.
It earlier downplayed concerns over the cedi’s early-year depreciation in 2026, which has remained steady.
Ghana's international reserves have crossed $14 billion, according to the latest available data from the Bank of Ghana.
The bank is counting on several inflows to reinforce its position in the coming months.
These include stronger remittance flows, development partner support, and disbursements linked to Ghana's IMF programme, comprising roughly $380 million in programme support alongside a further $240 million expected in July 2026.
Officials also cited improved investor sentiment following Ghana's credit rating upgrade from Fitch and the government's early Eurobond repayment as factors that could attract additional foreign currency flows.
Nevertheless, the Bank of Ghana has acknowledged that risks persist, particularly around uncertainties in the Middle East peace process, and said it will continue monitoring developments and introducing stabilisation measures as necessary.
The cedi remains among the strongest currencies in Africa, per data from the Forbes calculator.
Source: YEN.com.gh
