Why the cedi is losing ground and how BoG plans to stabilise it
The Ghana cedi is facing renewed pressure as demand for US dollars increases, with the currency falling by 1.86% against the dollar in July after gaining 3.30% in June.
The June gain was supported by the Bank of Ghana, which supplied about US$2.01 billion to the foreign exchange market.
However, the pressure returned in July as businesses demanded more dollars, particularly to pay for energy imports. The situation continued into August, with the cedi recording further losses.
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The pressure is also being driven by businesses importing more goods ahead of the Christmas season. Importers need dollars to pay for these goods, increasing demand for foreign exchange.
Higher crude oil prices have added to the pressure, as more dollars are required to pay for energy imports.
The Bank of Ghana, however, expects the pressure to ease and says the cedi should remain relatively stable over the medium term.
In its July 2026 Monetary Policy Report, the central bank acknowledged that renewed foreign exchange demand ahead of the Christmas season could put pressure on the currency.
“Over the medium term, the Ghana cedi is expected to remain relatively stable,” the Bank stated.
The central bank said it would rely on foreign exchange intermediation and other sources of dollar inflows to help meet market demand. It also pointed to remittance inflows as another source of foreign exchange that could reduce pressure on the cedi.
“FX intermediation is expected to moderate the pressures on the cedi, along with remittance flows,” it added.
Meanwhile, as part of efforts to increase the supply of dollars to the market, the Bank of Ghana is expected to provide about US$500 million in September through its foreign exchange intermediation programme.
The move is intended to improve access to foreign exchange for businesses and other legitimate market participants.
A further US$700 million is expected to be provided to the Bank of Ghana for reserve accumulation under the Ghana Accelerated National Reserve Accumulation Policy (GANRAP). The funds are expected to strengthen the country’s foreign exchange reserves and support confidence in the currency.
The approach builds on GoldBod’s performance in August, when it generated US$1.315 billion in foreign exchange. Of this amount, US$668.21 million was sold directly to commercial banks, while US$646.59 million was made available to the Bank of Ghana for reserve accumulation.
The Bank of Ghana has also maintained that it will intervene when necessary to ensure orderly conditions in the foreign exchange market while allowing the cedi to respond to market forces.
Its foreign exchange framework includes forward FX auctions designed to improve the availability of dollars and reduce pressure created by businesses buying foreign exchange in advance.
The immediate challenge, therefore, is to ensure that the supply of dollars keeps pace with rising demand from importers, particularly as businesses increase their purchases ahead of the festive season.
The combination of BoG foreign exchange support, remittance inflows, GoldBod’s dollar generation and reserve accumulation is expected to help ease the pressure and support greater stability in the cedi.
ANAS/MA
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