The Ghana cedi has begun to weaken against the US dollar since late March 2026. This follows a period of remarkable strengthening in 2025. Many Ghanaians are concerned about the cedi’s current downward trend.
The recent depreciation might seem surprising. The cedi experienced a strong increase in value during 2025. It appreciated by about 40.7% against the US dollar. The currency traded around GHS 14.7 to the dollar at the start of 2025. By the end of the year, it was near GHS 10.4. A stable exchange rate after such a sharp gain would be difficult to maintain. In 2025, President Mahama suggested a 5% annual depreciation could be acceptable. This level supports stability and competitiveness.
Several factors supported the cedi’s 2025 rise. Gold prices remained high. Government spending was controlled. Ghana also saw strong earnings from gold exports. The creation of GoldBod helped manage gold export proceeds. These inflows were directed to the Bank of Ghana. However, current pressures stem from rising dollar demand. There are also temporary disruptions to dollar supplies.
Energy imports are a major cause of pressure. The conflict in the Middle East has increased global oil prices. Crude oil prices rose above $100 per barrel. Ghana imports most of its refined petroleum products. This has significantly increased the country's monthly fuel import costs. Industry estimates show Ghana’s monthly petroleum imports are now about US$500 million. This is up from US$400 million in 2025. This increase alone boosts demand for dollars.
A seasonal factor is also at play. Following the release of 2025 financial results, foreign companies are sending profits back home. These dividend payments require US dollars. Companies in South Africa or the UK will not accept Ghanaian cedis. This adds more demand for dollars in the foreign exchange market. Businesses also restock inventory around the middle of the year. This creates further demand for dollars to pay for imports.
These factors combined point to high demand for foreign currency. Such pressure normally becomes a problem if dollar supply falls. There are signs that Ghana's foreign exchange inflows faced disruptions. This happened during the early stages of the Middle East conflict. GoldBod sells most of Ghana’s small-scale gold to markets like Dubai and India. Airspace disruptions in the Middle East affected trade routes. GoldBod CEO Sammy Gyamfi confirmed some gold exports were temporarily halted. This was a management decision amid market uncertainty.
Reuters reported GoldBod was looking to increase gold sales to India. However, India has also managed its gold imports to support its own currency. These developments could have slowed Ghana's dollar inflows. This occurred at a time when dollar demand was rising sharply.
Despite these issues, the Bank of Ghana believes foreign exchange conditions are strong. The Governor, Johnson Pandit Asiama, stated dollar supply is still robust. Ghana’s gross international reserves are around US$14 billion. They continue to grow. The problem might not be a lack of dollars. It could be that the Bank of Ghana is not intervening heavily in the market. The central bank is working under a new framework developed with the IMF in late 2025. This framework aims to reduce excessive intervention. It allows the exchange rate to move more freely. These movements must be orderly.