Cedi loses 8.4% to US dollar despite strong external sector performance

The Bank of Ghana has disclosed that the Ghana cedi depreciated by 8.4% against the US dollar during the first five months of 2026, according to its May 2026 Economic and Financial Data Summary.

The decline occurred despite Ghana's continued strong performance in the external sector and improving macroeconomic indicators.

According to the central bank, the cedi weakened from an average mid-rate of GH¢10.95 to the US dollar in January 2026 to GH¢11.4125 by mid-May 2026.

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The latest figure is higher than the 6.6% depreciation recorded over the same period in 2025, suggesting that the local currency remains under pressure despite signs of economic recovery.

The cedi came under significant strain at the start of the year, posting a year-to-date depreciation of 4.6% in January. Although it showed some recovery in February, the currency resumed its downward trend in March and continued to weaken steadily through April and May.

Unlike the sharp and volatile swings witnessed in 2025, the depreciation recorded in 2026 has been more gradual, but persistent.

The Bank of Ghana also reported that Gross International Reserves rose to US$14.42 billion in May 2026, sufficient to cover approximately six months of imports.

At the same time, inflation dropped sharply to 3.4% in April 2026, compared with 18.4% during the corresponding period in 2025, underscoring notable progress in macroeconomic stability.

Financial analysts caution that sustained pressure on the exchange rate could affect import costs, inflation expectations, and business operations if the trend continues in the coming months.

ANAS/MA

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