Bank of Ghana reports 7.11% cedi depreciation against the US dollar

The Bank of Ghana’s Monetary Policy Report for September 2026 reveals that the Ghana cedi depreciated by 7.11% against the US dollar during the first eight months of the year. This performance represents a notable shift from the same period in 2025, when the local currency experienced significant appreciation. The central bank attributed the current pressure on the foreign exchange market to heightened seasonal demand, primarily driven by the energy and commerce sectors.

In addition to its decline against the dollar, the cedi recorded year-to-date depreciations of 7.78% against the British pound and 6.09% against the euro as of August 2026. While the nominal figures indicate a decline in value, the report highlighted that exchange rate volatility remained lower in the first 185 days of 2026 compared to the preceding four years. However, in real effective terms, the cedi’s depreciation was measured at 8.47%, contrasting with the gains recorded in the previous year.

The currency's performance and the central bank's monetary stance have prompted a strategic shift among institutional investors, including pension funds, insurance companies, and commercial banks. With the 91-day Treasury bill rate falling to 4.6%—resulting in negative real returns against an inflation rate of approximately 5.2%—investors are increasingly moving away from short-term government securities. Instead, they are rebalancing their portfolios toward restructured Domestic Debt Exchange Programme (DDEP) bonds and other longer-dated government debt to secure better inflation-adjusted returns.

Despite the seasonal pressures, the Bank of Ghana maintains a cautious monetary policy aimed at stabilizing the currency and managing inflation. Market data from mid-October indicates the cedi has continued to trade around GH₵12.30 at forex bureaus, though it has shown minor intermittent signs of appreciation in daily spot trading. Analysts expect the central bank to continue monitoring demand from the commerce sector to mitigate further depreciation and ensure the stability of the Ghana Fixed Income Market (GFIM) amidst the ongoing portfolio rebalancing by major financial institutions.