Gross international reserves climb although 'cedi under pressure'

While foreign exchange (FX) reserves climbed to their highest level in more than a year during May, such gains have yet to halt pressure on the cedi as rising corporate dollar demand, seasonal dividend repatriation and elevated oil prices continue weighing on the currency.

Data from the Bank of Ghana show gross international reserves rising to US$14.4billion as of May 18, 2026, equivalent to 5.7 months of import cover – up from US$13.8billion at end-December 2025.

The reserve build-up coincided with an improvement in Ghana’s external position in the first quarter, with the current account surplus widening to US$3.10billion from US$2.43billion for the corresponding period of 2025.

Bank of Ghana Governor Dr Johnson Asiama, during the central bank’s 130th Monetary Policy Committee press briefing, observed that the stronger external position was driven by robust gold and cocoa export earnings as well as resilient remittance inflows, despite rising payments for services and investment income.

Yet the stronger reserve position has not translated into cedi stability.

Databank Research said the currency’s year-to-date depreciation had extended to 10.11 percent by close of the third week in May, amid sustained foreign exchange demand pressures.

However, Dr Asiama attributes the current pressure primarily to increased dollar demand from the energy sector and seasonal dividend payments by multinational companies. He said the central bank’s regular FX auctions remain active and adequately supplied.

Dr Asiama stressed that the central bank is not engaging in extraordinary market intervention despite the depreciation pressures, arguing the current strategy is focused on preserving and rebuilding reserve buffers.

BoG has continued to provide FX liquidity through its twice-weekly auctions, with around US$1billion programmed for release into the market this month.

The current depreciation cycle carries risks for inflation and fuel prices – particularly as geopolitical tensions in the Middle East continue to support elevated crude oil prices.

Dr Asiama acknowledged that external developments remain a key variable for Ghana’s FX market outlook.

A market analyst believes the Bank of Ghana appears willing to allow the cedi’s gradual adjustment toward what he described as its “true value” while simultaneously repairing its balance sheet.