Cedi to weaken by 8% in 2026 despite strong reserves - Fitch Solutions

UK-based research firm Fitch Solutions has projected that the Ghana cedi will weaken by 8.0% against the US dollar in 2026.

In its latest 2026 Economic Outlook for Ghana, Fitch noted that the expected depreciation is lower than the cedi’s long-term average annual decline of 10.2% recorded between 2010 and 2025, reflecting relatively improved macroeconomic buffers.

The firm said inflation is expected to edge higher in the second half of 2026 due to demand-side pressures, but will remain modest compared to recent years.

“Indeed, elevated global gold prices and healthy international reserves will limit any undue pressure on the exchange rate in the coming quarters,” Fitch stated.

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Fitch also noted that the government’s plan to increase base pay by 9 percent, as outlined in the 2026 Budget, is expected to support household purchasing power.

However, the projected depreciation of the cedi is likely to have implications for prices of goods and services. A weaker currency typically raises the cost of imported items, including food, clothing, electronics, and household essentials, which could translate into higher consumer prices.

Petroleum prices may also be affected, as fuel imports are priced in US dollars. Any increase in fuel costs could lead to higher transport fares and production expenses, potentially feeding into broader price increases across the economy.

For households, this could mean increased pressure on budgets, as higher prices reduce purchasing power despite anticipated wage adjustments. Families may be forced to spend more on basic necessities, leaving less disposable income for savings or discretionary spending.

Fitch Solutions added that private consumption is expected to remain strong, forecasting growth of 6.5% in 2026, contributing 5.3 percentage points to headline real Gross Domestic Product growth.

The cedi recorded strong gains in the first 10 months of 2025, appreciating by 32.2% against the US dollar on the interbank market. However, it has experienced slight depreciation toward the end of the year, largely driven by seasonal demand pressures and cautious foreign exchange support from the Bank of Ghana.

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