Ghana’s cedi has clawed back some of its recent losses against major international currencies, gaining 1.20% against the US dollar and pound sterling on the interbank market as fresh foreign exchange interventions provide some relief to the struggling local currency.
The modest recovery offers a welcome development after months of pressure on the cedi, although the currency continues to face challenges, with its year-to-date depreciation standing at approximately 9.0%.
The latest performance shows that the cedi is regaining some ground against major trading currencies, even as exchange rate movements remain a concern for businesses, importers and households that depend on foreign goods and services.
The local currency closed the latest fortnight of trading at GH¢11.65 to the US dollar, compared with its previous position, representing a 1.20% appreciation. It recorded a similar 1.20% gain against the British pound, closing at GH¢15.57.
Against the euro, the cedi registered a more modest improvement of 0.16%, ending the period at GH¢13.04.
The gains indicate a slight improvement in the currency’s performance on the interbank market, although the extent to which the recovery can be sustained will depend on developments in foreign exchange supply, market demand and broader economic conditions.
Cedi Gains Ground as Forex Support Intensifies
The recent improvement in the cedi’s performance has coincided with increased intervention in the foreign exchange market, including a US$130 million spot sale at GH¢11.60 per dollar.
The intervention was intended to support the local currency by increasing the availability of foreign exchange in the market and helping to ease pressure on the exchange rate.
Foreign exchange supply remains an important factor in determining the cedi’s performance. When demand for dollars rises faster than the available supply, the local currency typically faces depreciation pressure. An increase in dollar supply can help ease those pressures, particularly when market participants are competing for foreign currency to settle import bills and other international obligations.
The latest recovery suggests that additional foreign exchange supply may be helping to improve market conditions. However, a short-term appreciation does not necessarily mean that the cedi has entered a sustained recovery phase.
The currency’s performance over the coming weeks will remain important in determining whether the recent gains can be preserved or whether renewed demand for foreign exchange will reverse some of the improvements.
Dollar Still Sells at GH¢12.15 on Retail Market
Despite the cedi’s gains on the interbank market, exchange rates in the retail market continue to reflect a weaker position for the local currency.
The cedi began the week trading at GH¢12.15 to the US dollar at forex bureaus, highlighting the difference between interbank and retail market rates.
The retail market had previously recorded relative stability against the dollar at GH¢12.10. The latest movement to GH¢12.15 suggests that the gains recorded on the interbank market have yet to translate into a stronger retail exchange rate.
This distinction matters because many individuals and businesses obtain foreign currency through forex bureaus and other retail channels. Importers sourcing dollars to pay overseas suppliers may therefore continue to face exchange rate costs that differ from the rates quoted on the interbank market.
A stronger cedi can help reduce the local currency cost of imported goods, fuel, machinery and raw materials. However, the benefits depend partly on how quickly exchange rate improvements are reflected in retail transactions and business pricing decisions.
The retail market also recorded gains against other major currencies. The cedi appreciated by 0.32% against the pound to trade at GH¢15.85 and gained 1.11% against the euro to sell at GH¢13.50.
These movements suggest that the cedi’s recent improvement has extended beyond the dollar, although the differences in the scale of appreciation indicate that its performance remains uneven across currency pairs.
9% Year-to-Date Loss Remains a Concern
While the latest figures provide some encouragement, the cedi’s approximately 9.0% year-to-date loss remains a significant consideration for the economy.
Depreciation can increase the cost of importing goods and services, placing pressure on businesses that rely on foreign inputs. Companies may respond by raising prices, reducing profit margins or delaying purchases, depending on their ability to absorb higher costs.
Consumers can also feel the effects through more expensive imported food products, electronics, pharmaceuticals and other essential items.
Currency depreciation may further complicate financial planning for businesses with foreign currency loans or obligations. When the cedi loses value, servicing dollar-denominated debt becomes more expensive in local currency terms, potentially putting additional pressure on corporate finances.
The recent appreciation could help moderate some of these pressures if it proves durable. Nevertheless, a recovery over a fortnight must be viewed against the broader year-to-date performance rather than as conclusive evidence that the currency’s difficulties have ended.
Market participants will be watching whether the cedi can maintain its gains and whether improved foreign exchange supply translates into more stable trading conditions across the market.
$1.5bn Forex Programme Could Support Further Recovery
The foreign exchange intervention programme also includes plans to supply US$1 billion to commercial banks and provide an additional US$500 million to the Bank of Ghana for reserve accumulation as part of the October 2026 programme.
The planned US$1.5 billion supply forms part of a broader effort to support the recovery and stability of the local currency.
Providing dollars to commercial banks could help meet foreign exchange demand from businesses and other market participants. Meanwhile, additional funds for reserve accumulation could strengthen the country’s external buffers, depending on how the transactions are executed and their overall impact on reserves.
However, the effectiveness of such interventions will depend on the timing and scale of the foreign exchange supply, prevailing market demand and the sustainability of the underlying sources of dollars.
Ghana’s ability to generate foreign exchange through exports, particularly gold, cocoa and other commodities, will remain important alongside the management of demand for imports and external payments.
Cedi’s Recovery Faces a Crucial Test
The cedi’s 1.20% appreciation against the dollar marks a modest improvement after recent losses, but the retail exchange rate of GH¢12.15 and the currency’s approximately 9.0% year-to-date depreciation show that pressure has not disappeared.
The planned foreign exchange injections could provide further support, particularly if they improve dollar availability and ease demand pressures in the market.
Ultimately, the durability of the recovery will depend on whether the cedi can sustain its recent gains beyond short-term interventions. Businesses and consumers will be looking for more consistent exchange rate stability, while market participants will be monitoring whether the latest improvement signals a lasting change in the currency’s performance.
In the intervening time, the cedi has recovered some lost ground, but maintaining that progress remains the bigger challenge.
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