Ghana’s currency has begun 2026 under renewed pressure, with the cedi depreciating by 4.0 percent against the United States dollar in January, according to the Bank of Ghana.
The decline marks a sharp turnaround from the strong appreciation recorded throughout most of 2025 and signals the re-emergence of familiar exchange rate challenges at the start of the new year.
Data from the Bank of Ghana’s January 2026 Summary of Economic and Financial Data shows that the cedi traded at GH¢10.88 to the dollar in the interbank market during the month, compared with GH¢10.45 in December 2025. In the retail market, the local currency weakened further, selling at approximately GH¢12.00 to one American greenback.
The January performance has raised fresh questions about the sustainability of recent currency gains and the balance between improved macroeconomic indicators and persistent external pressures.
From Strong 2025 Rally to January Reversal
The January depreciation stands in contrast to the cedi’s impressive performance in 2025. After beginning 2025 with a 3.9 percent loss against the dollar, the local currency continued to depreciate through February and March before stabilizing in April. A dramatic turnaround followed in May 2025, when the cedi gained 43 percent in value against the dollar since January 1, 2025.
That rally extended through the rest of the year, allowing the cedi to end 2025 with a year-to-date gain of 40.7 percent. The strong performance was supported by improved foreign exchange inflows, tighter monetary policy, fiscal consolidation efforts, and renewed investor confidence following Ghana’s debt restructuring programme.
However, the January 2026 figures suggest that the momentum built in 2025 may be facing early headwinds, particularly as global financial conditions remain tight and demand for foreign currency rises at the beginning of the year.
Broad-Based Weakness Against Major Currencies
The cedi’s weakness in January was not limited to the US dollar. The local currency also depreciated against the British pound and the euro, losing 4.9 percent and 4.1 percent respectively during the month. In the interbank market, the cedi traded at GH¢14.77 to the pound and GH¢12.80 to the euro.
This broad-based depreciation reflects increased demand for major currencies, especially for imports, debt servicing, and offshore transactions, which typically intensify in the first quarter of the year. Analysts note that seasonal demand pressures, combined with cautious investor sentiment, often place strain on the cedi during this period.
Mixed Performance Over Two-Week Period
Despite the overall January decline, recent data points to a more nuanced picture in the short term. Over the last two weeks, the cedi recorded mixed performance across market segments, highlighting the complex dynamics shaping currency movements.
In the interbank market, the dollar strengthened against the cedi, with the midrate closing at GH¢10.88, up from GH¢10.70. Conversely, the pound and euro eased by 2.70 percent and 2.57 percent to close at GH¢14.78 and GH¢12.80 respectively against the cedi.
In the retail market, movements differed. The dollar firmed modestly against the cedi to GH¢11.90 from GH¢12.15, suggesting a slight improvement in retail pricing. Meanwhile, the pound and euro strengthened by 1.58 percent and 2.18 percent, closing at midrates of GH¢15.80 and GH¢13.75 respectively.
This divergence between interbank and retail rates underscores ongoing liquidity and pricing differences within the foreign exchange market.
Drivers Behind the Renewed Dollar Pressure
Market watchers attribute the cedi’s January depreciation to a combination of domestic and external factors. On the domestic front, early-year demand for foreign exchange by importers, coupled with corporate dividend repatriation and public sector obligations, has increased pressure on the local currency.
Externally, a strong US dollar environment continues to weigh on emerging and frontier market currencies, including Ghana’s. Higher interest rates in advanced economies and geopolitical uncertainties have encouraged investors to seek safe-haven assets, strengthening the dollar and reducing capital flows to riskier markets.
While Ghana’s foreign exchange reserves have improved compared to previous years, the January data suggests that maintaining exchange rate stability will require continued policy discipline and effective market interventions.
Outlook for the Cedi in 2026
In the near term, analysts remain cautiously optimistic but emphasize the need for sustained macroeconomic discipline. The Bank of Ghana’s commitment to tight monetary policy, alongside government efforts to deepen fiscal consolidation, will be critical in anchoring expectations and limiting excessive volatility.
Export earnings, cocoa receipts, and improved inflows from the gold and oil sectors could provide some support for the cedi in the coming months. However, any slippage in policy implementation or resurgence in inflationary pressures could amplify currency risks.
The January depreciation serves as an early reminder that while significant progress was made in 2025, exchange rate stability remains fragile. As 2026 unfolds, the ability of policymakers to manage dollar pressure and sustain confidence will play a defining role in the cedi’s performance and Ghana’s broader economic trajectory.
All in all, dollar pressure has clearly returned, with the cedi’s 4.0 percent decline in January 2026 marking a cautious start to the year. Although the currency ended 2025 on a strong note, the latest figures highlight the ongoing vulnerabilities facing Ghana’s foreign exchange market. How authorities respond to these pressures in the months ahead will determine whether the January dip becomes a temporary adjustment or the start of a more sustained trend.
