- Cedi Slips To 11.53 Per Dollar as Energy-Sector FX Demand Rises
Ghana’s cedi is expected to remain under pressure over the coming week as unmet corporate demand for dollars, particularly from oil importers, weighs on sentiment in the interbank foreign exchange market.
Reuters reported that the cedi was trading at 11.53 to the US dollar on Thursday, compared with 11.40 a week earlier, reflecting a depreciation of about 1.14% over the period. The currency is expected to remain on the defensive as energy-sector demand for foreign exchange strengthens alongside a rebound in crude oil prices.
The pressure on the cedi comes despite Ghana’s recent macroeconomic stabilisation efforts and stronger investor confidence in parts of the domestic market. For the foreign exchange market, however, the immediate issue remains the availability of dollars to meet corporate demand, especially from import-heavy sectors such as petroleum.
According to Reuters, the last central bank foreign exchange auction held on Tuesday attracted bids of US$311.00 million against an offer of US$110.00 million, suggesting that dollar demand continues to exceed available supply. That gap points to persistent unmet demand in the market, a factor likely to keep the local currency under strain in the near term.
The situation underlines the sensitivity of the cedi to energy imports. Ghana remains heavily dependent on imported refined petroleum products, and any rise in crude prices or petroleum demand tends to increase pressure on the foreign exchange market. Even when broader macroeconomic indicators improve, strong dollar demand from oil importers can quickly test currency stability.
The cedi’s latest movement also places Ghana within a wider African currency pattern. Reuters said the currencies of Ghana, Nigeria and Uganda are expected to remain under pressure in the week to Thursday, while Kenya’s shilling and Zambia’s kwacha are expected to stay broadly stable.
In Nigeria, the naira is also expected to weaken after the Dangote Petroleum Refinery began pricing local fuel sales in dollars, increasing demand for hard currency. The naira was quoted at 1,383 to the US dollar on the official market on Thursday, slightly weaker than 1,379 a week earlier, representing a depreciation of about 0.29%. In street trading, the currency was changing hands at 1,425 to the dollar.
Nigeria’s case highlights a similar structural challenge: the link between fuel markets and foreign exchange pressure. Even with local refining capacity, dollar-based pricing of petroleum products can intensify demand for foreign exchange and create pressure on the domestic currency.
Uganda’s shilling is also expected to weaken as dollar demand recovers after large companies complete mid-month tax payments. Commercial banks quoted the shilling at 3,685/3,695 to the dollar, compared with 3,680/3,690 the previous Thursday.
Kenya’s shilling, by contrast, is expected to remain stable, with traders citing a balance between dollar demand and supply. Commercial banks traded the currency at 129.25/129.45 to the dollar, compared with 129.15/129.35 a week earlier. Traders also said Kenya’s central bank had intervened by buying dollars toward the end of last week.
Zambia’s kwacha is also expected to hold steady ahead of a Treasury bill auction scheduled for July 23. Commercial banks quoted the kwacha at 18.44 to the dollar, compared with 18.31 a week earlier, but analysts expect the auction to provide some support despite rising demand for dollars.
For Ghana, the key market signal is that foreign exchange demand remains concentrated and sector-driven. Oil importers continue to be a major source of demand, and unless supply improves through central bank auctions, export receipts or stronger market inflows, the cedi may remain vulnerable to short-term depreciation pressure.
The Bank of Ghana’s foreign exchange auction data will therefore remain closely watched by banks, importers and investors. The size of bids relative to actual supply offers an important indication of underlying pressure in the market.
The broader policy challenge is to preserve confidence without exhausting reserves or allowing disorderly currency movements. That will require a careful balance between foreign exchange supply management, monetary policy credibility, stronger export receipts and measures to reduce structural import dependence.
In the immediate term, however, traders appear focused on energy-sector demand and the ability of the market to clear outstanding dollar requirements.
The cedi’s movement from 11.40 to 11.53 per dollar may appear modest, but it reinforces a familiar vulnerability in Ghana’s external sector: when energy prices rise and corporate dollar demand strengthens, currency stability can quickly come under renewed pressure.
