- Cedi Loses 1.8% in Two Weeks as FX Auctions Attract Three Times Available Supply
Ghana’s cedi has weakened to the edge of GH¢11.70 against the US dollar, intensifying pressure on the Bank of Ghana as elevated oil prices, strong importer demand and reduced foreign-exchange inflows expose a growing imbalance in the domestic currency market.
The central bank’s interbank reference rate for September 30 placed the dollar at approximately GH¢11.6842 buying and GH¢11.6958 selling, producing a midpoint of about GH¢11.69.
That represented a deterioration of roughly 0.26 per cent in a single trading session. More significantly, the dollar has risen from about GH¢11.57 on September 24 and GH¢11.48 a week earlier.
USD/GHS has therefore increased by approximately 1.83 per cent from the GH¢11.48 level, equivalent to a loss of about 1.8 per cent in the cedi’s dollar value in less than two weeks.
The movement is not yet a currency crisis. But it is becoming more difficult to dismiss as ordinary daily volatility.
The cedi’s depreciation has been gradual rather than disorderly, moving through GH¢11.48, GH¢11.57 and now approximately GH¢11.69. Yet the persistence of that movement, combined with the intensity of demand at central bank auctions, suggests the underlying pressure is becoming more structural.
Reuters reported that every Bank of Ghana foreign-exchange auction in September up to September 24 was oversubscribed by more than three times. Corporate demand from commerce and energy importers continued to exceed available interbank supply, while foreign-exchange inflows from the extractive sector moderated.
One market trader said the auction results were “signalling firm and persistent FX demand”.
The importance of this signal lies not simply in the cedi reaching another numerical threshold. It indicates that businesses are seeking substantially more dollars than the central bank is prepared or able—to supply through its regular market interventions.
The approach to GH¢11.70 means the escalation level identified in the previous NorvanReports African FX schedule has effectively been reached.
The next risk zone is between GH¢11.75 and GH¢11.80. A sustained move into that range would suggest that demand pressures are no longer being contained by existing market supply and central bank interventions.
That risk would become more serious if FX auctions continue to attract demand exceeding available supply by three times or more, or if the Bank of Ghana is forced to make substantially larger dollar injections.
The central bank faces an uncomfortable policy choice.
It could increase its intervention to slow the cedi’s decline. But selling more dollars would draw down international reserves at a time when reserve accumulation has already weakened.
The Bank of Ghana’s Summary of Economic and Financial Data showed gross international reserves declining from US$14.16bn in March 2026 to US$11.07bn in August. Import cover correspondingly fell from 5.7 months to 4.2 months.
Net international reserves also declined from US$11.87bn to US$8.69bn over the same period.
These figures do not suggest Ghana is approaching an immediate external-payments emergency. They do, however, reduce the amount of room available for repeated and expensive currency intervention.
Alternatively, the Bank could allow the exchange rate to adjust more freely. That would preserve reserves but risk transmitting higher import costs into fuel, transport, food and other consumer prices.
The Monetary Policy Committee’s decision to keep the policy rate at 14 per cent was partly intended to maintain an anchor for inflation expectations while the central bank assessed these external-sector risks.
A faster depreciation of the cedi would complicate that strategy. It could narrow the space for a future rate reduction and, if imported inflation accelerates significantly, revive discussion about whether monetary conditions need to be tightened.
The difference between the interbank and retail markets provides another indication of pressure.
Forex bureaux were quoting the dollar at approximately GH¢11.85 buying and GH¢12.20 selling on September 30. The retail selling rate was consequently about 4.3 per cent above the official interbank level.
Part of that differential reflects the normal operating costs and margins of retail currency dealers. But a sustained premium of this size may also indicate that smaller businesses, travellers and individuals are finding it more difficult to obtain dollars at official market prices.
A widening retail premium can create a feedback loop. Businesses expecting the cedi to weaken further may accelerate their dollar purchases, increasing immediate demand. Exporters and other holders of foreign currency may delay conversion, reducing supply.
The market can then begin to generate the very depreciation that participants are attempting to protect themselves against.
That is why the Bank of Ghana’s communication will matter almost as much as its interventions. The central bank must convince businesses that sufficient liquidity will remain available for legitimate transactions without creating an expectation that it will defend a fixed exchange-rate level at any cost.
The deterioration in the cedi is occurring alongside a severe global energy shock.
Brent crude’s November contract closed September 30 at US$103.50 per barrel, gaining approximately 14 per cent over the month. The increase reflected stalled US-Iran negotiations, tight refined-product markets and continuing supply disruptions.
Russia has also extended its diesel-export ban until the end of October, placing further pressure on a global market already affected by refinery disruptions and armed conflicts. Russia has historically been one of the world’s largest diesel exporters.
For Ghana, the combination of an expensive dollar and oil above US$100 creates a double exposure.
Petroleum importers require more dollars to purchase the same volume of fuel, increasing FX demand. At the same time, each dollar costs more cedis. Unless taxes, margins or price-stabilisation mechanisms absorb part of the shock, the combined effect eventually reaches consumers through higher fuel and transport costs.
The pressure could persist even if crude prices retreat because diesel and other refined products are also being affected by global supply constraints.
This distinguishes the current episode from a purely speculative currency movement. Ghana’s dollar demand is being driven partly by the real cost of importing energy and goods required by the domestic economy.
Other African currencies are not experiencing the same pattern uniformly.
South Africa’s rand strengthened by about 0.5 per cent to approximately ZAR16.3250 against the dollar on September 30, supported by better-than-expected trade data, slower producer-price inflation and stronger private-sector credit growth.
The rand’s performance suggests that the cedi’s weakness cannot be attributed solely to a generally stronger dollar or a broad retreat from African currencies.
Global conditions are contributing to the pressure, but Ghana’s declining reserves, moderated extractive-sector inflows, strong corporate demand and heavily oversubscribed FX auctions point to a significant domestic component.
The immediate outlook is therefore amber to high risk rather than red.
The cedi remains in a managed and functioning market, and the pace of depreciation has not yet become disorderly. But the move toward GH¢11.70 confirms that the demand-supply imbalance has persisted despite central bank auctions.
The next test will be whether the Bank of Ghana can rebuild foreign-exchange supply without sacrificing too much of its reserve buffer.
If USD/GHS settles above GH¢11.75–GH¢11.80, the retail premium widens further or auction demand continues to exceed supply by more than three times, the market would be sending a stronger warning: Ghana’s gradual currency depreciation is evolving into a more consequential external-sector imbalance.
