In Ghana, the national currency, the cedi, has weakened again against the US dollar due to growing demand for foreign currency. In July, the cedi depreciated by 1.86% after strengthening by 3.30% in June, MyJoyOnline reports.
Demand for dollars rises
The cedi’s strengthening in June was linked to support from the Bank of Ghana, which directed $2.01 billion to the foreign exchange market to meet demand and maintain stability. As early as July, pressure on the national currency returned, in particular due to the need for dollars to finance energy imports.
In August, the trend persisted: over one week, the cedi lost 0.52%, and since the beginning of the month, 1.66%. Since the start of the year, the currency has depreciated by 8.06% against the dollar.
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Imports ahead of Christmas
New demand for dollars is also linked to business purchases ahead of the December Christmas season. According to market observers, the need for foreign currency may remain high as companies increase imports ahead of the holidays. Crude oil prices, which affect the amount of currency needed to finance energy imports, were named as an additional factor.
Bank of Ghana measures
The Bank of Ghana described the latest fluctuations as a normal market development and said it expects relative stability of the cedi through the end of 2026. The regulator believes that foreign exchange interventions and remittance inflows will help ease pressure on the exchange rate.
In September, the central bank plans to provide the market with about $500 million through a foreign exchange intermediation programme. The Ghana Gold Board is also expected to provide additional support: the target volume of foreign currency inflows in September is $1.4 billion. Of this amount, $700 million is planned to be provided to commercial banks through spot sales and funded forward contracts, while another $700 million will go to the Bank of Ghana to build up reserves under the GANRAP programme.
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