Ghana cedi faces renewed pressure as dollar demand surges

The Ghana cedi has once again come under pressure, crossing the GH¢11 mark against the US dollar in commercial bank transactions, despite being recognized as Africa’s best-performing currency so far in 2025.

Checks across selected commercial banks show that the dollar is being sold between GH¢11.00 and GH¢11.30, while the Bank of Ghana’s (BoG) official interbank rate as of Monday stood at GH¢10.90.

At the retail level, forex bureaus are quoting much higher rates, with some selling at around GH¢12.20.

Background: From Stability to Renewed Volatility

The cedi’s performance in 2025 has been one of the strongest in recent history.

By mid-August, it had appreciated by over 40% against the US dollar, buoyed by investor confidence, improved foreign inflows, and policy interventions by the BoG.

Even with the current dip, Databank Research reports that the currency has still gained about 36% year-to-date, making it the strongest performer in Africa.

However, history shows that the cedi has often struggled to sustain periods of stability, especially when seasonal demand pressures — such as pre-Christmas import financing — coincide with reduced foreign currency supply.

Dollar Demand Outpaces BoG Supply

Commercial banks attribute the current depreciation to a mismatch between demand and supply.

Businesses are rushing to secure dollars for import financing, while others are engaging in speculative buying, fearing future shortages.

Recent data confirms these supply constraints. Earlier this month, commercial banks demanded over $300 million from the central bank during its forex auction, but only $100 million was released.

Similarly, forward sales in July 2025 dropped by 53.6% compared to June, with the BoG notably absent from the market on July 25 and 29 — its first no-show since April.

An IC Securities report described the situation as a “tight supply environment” that has emboldened speculative activity.

Stakeholders React

John Awuah, Chief Executive of the Ghana Association of Banks, confirmed that banks are working closely with the BoG to address the mismatch.

He pointed to recent regulatory directives that limit large forex withdrawals not backed by deposits as one of the measures intended to protect the cedi.

Meanwhile, the BoG has sought to calm market fears, insisting that it has sufficient reserves to intervene when necessary.

Officials argue that not all demand for dollars is linked to genuine business needs, with some driven by speculation and market panic.

The central bank has also dismissed calls to directly fix the exchange rate, maintaining that fluctuations are part of a liberalized forex regime, provided they remain within manageable limits.

Instead, the BoG says it is adopting targeted strategies, including tighter monitoring of remittance inflows and measures to curb leakages in the forex market.