After weeks of modest pressure driven by moderated foreign exchange supply, the Ghana cedi is expected to rebound in the near term, supported by a significant inflow from the International Monetary Fund.
Market analysts project that the local currency will stabilise within the GH¢11.39 to GH¢11.45 range against the US dollar over the next two weeks, reflecting renewed confidence following the IMF disbursement of US$385 million.
The recent depreciation of the cedi comes after a relatively strong performance earlier in the year. According to market watchers, the pressure seen in recent weeks does not reflect structural weaknesses but rather short-term dynamics linked to seasonal foreign exchange demand. This has raised optimism that the local currency’s fundamentals remain largely intact.
The IMF inflow is widely viewed as a critical catalyst for easing liquidity constraints in the foreign exchange market. The US$385 million disbursement is part of Ghana’s ongoing programme with the Fund and is expected to strengthen reserves while improving market sentiment.
Analysts believe the injection will help smooth volatility in the interbank market and provide importers with improved access to foreign exchange. With supply conditions set to improve, pressure on the cedi is expected to ease, paving the way for a rebound after the recent pullback.
Databank Attributes Weakness to Seasonal Demand
Databank Research has attributed the recent depreciation of the cedi to seasonal factors, particularly increased demand associated with year-end activities. According to the firm, businesses typically unwind positions and increase dollar demand toward the close of the year, creating temporary pressure on the local currency.
“We attribute this flow-driven moderation partly to year-end unwinding of demand positions; nonetheless, our analysis indicates that the cedi is trading at fair value, exhibiting low deviation from Real Effective Exchange Rate benchmarks and signalling no material over or undervaluation,” Databank Research noted.
This assessment suggests that the cedi’s recent losses are not indicative of misalignment with economic fundamentals but are instead part of a cyclical pattern that tends to correct itself as market conditions normalise.
Performance Across Wholesale and Retail FX Markets
In the wholesale or interbank market, the Ghana cedi recorded modest losses against the major currencies over the past two weeks. The US dollar closed the fortnight at a mid-rate of GH¢11.49, compared to GH¢11.41 previously, reflecting a slight depreciation.
The cedi also weakened against the British pound and the euro in the wholesale market. The pound settled at GH¢15.35, up from GH¢15.26, while the euro closed at GH¢13.47, compared to GH¢13.32 in the previous period. These movements highlight the broad-based nature of the recent pressure, although the scale of depreciation remained relatively contained.
In the retail foreign exchange market, the depreciation was more pronounced. The cedi closed at GH¢12.30 to one US dollar, representing a 2.03 percent depreciation over the two-week period. Against the pound and the euro, the local currency weakened by 2.75 percent and 2.79 percent, closing at GH¢16.35 and GH¢14.35 respectively.
At the beginning of the current week, the cedi opened trading at GH¢12.40 to the US dollar at forex bureaus, reflecting persistent retail market pressures. Analysts note that retail rates tend to react faster to shifts in sentiment and demand conditions, which explains the sharper movements compared to the interbank market.
Strong Year-to-Date Gains Support Outlook
Despite the recent slippage, the Ghana cedi remains one of the better-performing currencies in the region in 2025. Its year-to-date gain stands at an impressive 26.22 percent against the US dollar, underscoring the strength it has exhibited for much of the year.
This strong performance provides a cushion against short-term volatility and reinforces confidence in the currency’s medium-term outlook. Market analysts argue that the combination of IMF support, prudent monetary policy and improved fiscal discipline continues to underpin the cedi’s resilience.
Looking ahead, analysts expect the cedi to stabilise as IMF inflows boost liquidity and seasonal demand pressures fade. With Databank Research indicating that the currency is trading close to its fair value, the likelihood of sharp depreciation appears limited in the near term.
The expected stabilisation within the GH¢11.39 to GH¢11.45 range is seen as achievable if foreign exchange supply improves as anticipated. While global market risks remain, the prevailing outlook suggests that the Ghana cedi is positioned for a rebound, supported by strong fundamentals and renewed investor confidence.
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