Ghana’s Cedi Faces Renewed Pressure as Foreign Exchange Demand Surges in Q2
Ghana’s local currency is coming under renewed pressure as rising foreign exchange demand, corporate profit repatriation needs, and global market uncertainties continue to weigh on the cedi, raising concerns about exchange rate stability in the months ahead.
The cedi extended its recent losses against major international currencies over the past two weeks, reflecting growing demand for foreign currency in both the interbank and retail markets. Market analysts say the depreciation highlights the increasing strain on Ghana’s foreign exchange market despite significant intervention efforts by the Bank of Ghana.
Latest market data show that the cedi weakened against the US dollar, British pound, and euro as businesses and investors sought foreign currency amid moderate supply conditions. In the interbank market, the local currency traded at GHS 11.85 to the dollar, compared to GHS 11.63 during the previous review period. Similar declines were recorded against the pound and euro, with exchange rates moving to GHS 15.85 per pound and GHS 13.66 per euro.
The retail foreign exchange market mirrored the trend, with the cedi recording losses of 0.81 percent against the dollar, 1.83 percent against the pound, and 1.40 percent against the euro. The currency closed the period at average mid-rates of GHS 12.30 per dollar, GHS 16.35 per pound, and GHS 14.30 per euro.
The latest depreciation reflects a broader slowdown in the cedi’s performance. Between April and May 2026, the currency weakened by an average of 4.18 percent on a month-on-month basis, exceeding the 3.23 percent decline recorded at the end of April. This occurred despite aggressive intervention measures by the Bank of Ghana, which injected approximately $1.1 billion into the foreign exchange market during May to support liquidity and moderate volatility.
Financial analysts note that demand for foreign currency continues to outpace available supply, creating a challenging environment for the local currency. Market sentiment remains largely cautious, with investors closely monitoring developments in both domestic and international markets.
Beyond domestic factors, the cedi is also being affected by broader global trends. Rising demand for the US dollar across international markets has strengthened the greenback, while persistently elevated refined crude oil prices have increased import costs for many economies. Reports indicate that several central banks have been liquidating non-dollar assets to meet growing dollar-denominated obligations, further supporting global demand for the US currency.
Looking ahead, attention is turning to Ghana’s second-quarter corporate repatriation season, a period traditionally associated with increased foreign exchange demand. Multinational companies operating in Ghana are expected to begin repatriating profits and dividends to parent companies abroad, a process that typically places additional pressure on the local currency.
Analysts warn that the repatriation cycle could significantly increase demand for dollars in the coming weeks, potentially pushing the exchange rate beyond the current interbank level unless substantial foreign exchange inflows enter the market.
“Corporate demand typically peaks during the second-quarter repatriation window, driven by multinational dividend and profit outflows,” market observers noted, highlighting one of the key factors expected to influence currency movements in the near term.
To help stabilize market conditions, authorities have announced a $1.2 billion monthly foreign exchange support programme for June. The initiative is expected to improve liquidity and reduce speculative activity in the foreign exchange market. While analysts believe the programme could help contain excessive volatility, they caution that sustained stability will depend on the strength of foreign exchange inflows and broader economic conditions.
The pressure on African currencies is not limited to Ghana. South Africa’s rand also weakened during the review period, falling by 1.15 percent to close at ZAR 16.28 per US dollar. Analysts attributed the decline to rising oil prices, geopolitical tensions, and weakening investor appetite for risk-sensitive assets.
With global economic uncertainty persisting and commodity prices remaining elevated, both the cedi and the rand are expected to face continued challenges in the near term. For Ghana, the coming weeks will be closely watched as policymakers seek to balance foreign exchange demand, market confidence, and currency stability amid a challenging external environment.
