Cedi falls 13% this quarter as dollar demand surges
By Praisebell Rosemond Larbi
The Ghanaian cedi, once hailed as the world’s best-performing currency earlier this year, is facing renewed pressure as rising import demand and dollar shortages unsettle the foreign exchange market.
Data from Bloomberg indicates that the cedi has weakened by about 13 per cent this quarter, making it the worst performer globally during the period.
This marks a sharp reversal from its remarkable 50 per cent gain in the second quarter of 2025, which was largely underpinned by higher gold prices and investor optimism about Ghana’s recovery.
Market analysts attribute the recent depreciation to seasonal demand pressures, as businesses rush to secure foreign currency for imports ahead of the Christmas holiday season.
Ghana’s import-dependent economy brings in a wide range of goods, from food supplies to heavy machinery, with demand typically peaking in the last quarter of the year.
Hamza Adam, Head of Market-Risk Management at UMB Bank Ltd, explained that the central bank has not been able to meet all requests from commercial banks on behalf of their clients.
“As at last week, banks that filed dollar needs on behalf of their clients to the Bank of Ghana got about half of their requests. This week the central bank is trying to meet all demand,” Mr Adam noted.
The cedi was quoted 0.1 per cent weaker at GHS11.95 per dollar in early trading on Thursday.
On a year-to-date basis, however, it remains up about 23 per cent, a reminder of the currency’s earlier strength.
Despite Ghana’s gross international reserves climbing to a three-year high of USD11.1 billion at the end of June, the Bank of Ghana has signalled that it will not fully deploy reserves to cover all dollar demand.
Instead, it has stressed a cautious and strategic approach to intervention in line with the country’s International Monetary Fund (IMF) programme.
In a response to Bloomberg, the Bank of Ghana said: “The cedi should be stable within a reasonable range. Our role is to ensure fluctuations remain orderly, reflect fundamentals, and do not undermine confidence in the broader economy.”
