The Ghana cedi is facing renewed depreciation pressures as demand for US dollars continues to exceed available supply on the foreign exchange market.
Checks by JOYBUSINESS at some major commercial banks indicate that the pressure has persisted over the past two weeks, with businesses struggling to secure enough foreign exchange to meet their obligations.
The situation has been partly attributed to increased dollar demand from players in the energy sector, particularly for crude oil and refined petroleum product imports, as well as payments to power producers.
Some market participants have also pointed to insufficient dollar inflows and increased efforts by businesses to hedge against potential external shocks, including uncertainties linked to tensions in the Middle East.
In response to the pressure, the Bank of Ghana increased its weekly foreign exchange auction to $220 million last week.
However, demand remained significantly higher, with bids amounting to about $201 million reportedly left unmet at Thursday’s spot auction.
The cedi consequently lost 0.60% of its value during the week, taking its month-to-date depreciation to 1.86% and its year-to-date decline to 8.89%.
The latest depreciation follows a 3.30% appreciation recorded by the cedi in June, its first monthly gain of the year.
That performance was supported by increased intervention from the Bank of Ghana, which injected $2.01 billion into the foreign exchange market during the month. The central bank sold $1.2 billion through its Forex Intermediation Programme, with auctions held twice weekly.
Despite the intervention, demand remained strong, with commercial banks submitting bids totalling $3.42 billion.
The Bank of Ghana has sought to calm market concerns, describing the latest pressure on the cedi as temporary and assuring businesses that it remains capable of supporting the foreign exchange market when necessary.
The central bank said Ghana’s international reserves have now exceeded $14 billion and expects additional inflows from remittances, development partners and the IMF programme to strengthen its position.
Expected IMF-related inflows include about $380 million in programme support, as well as a further $240 million anticipated in July 2026.
The central bank also believes improved investor confidence following Ghana’s Fitch rating upgrade and the government’s early Eurobond repayment decision could boost foreign exchange inflows.
However, it acknowledged that risks remain, particularly developments in the Middle East that could push up global crude oil prices and increase demand for dollars.
The Bank of Ghana said it would continue monitoring market conditions and take appropriate measures to support stability in the foreign exchange market.
