The cedi’s depreciation has intensified, with the dollar now selling for around GH¢16.40 at some forex bureaux, as demand for the U.S. currency continues to outpace supply.
The dollar crossed the GH¢16 mark just two days ago on August 26 and has gained an additional 40 pesewas in just 48 hours, raising concerns of a return to the days of rapid cedi depreciation.
Earlier in May, the cedi briefly reached GH¢16 against the dollar but pulled back after several administrative measures, including the arrest of black-market operators. While the cedi continued to depreciate, the pace slowed down. At the start of August, the cedi enjoyed some stability and even posted marginal gains against the dollar, as dollar supply exceeded demand on the interbank market. This was partly driven by speculation that the Bank of Ghana (BoG) would intervene in the market in a significant way.
However, the renewed depreciation began just a day after the Ghana Cocoa Board (COCOBOD) announced it would not secure the annual cocoa syndicated loan of approximately $1.5 billion, leading to a surge in dollar demand.
Forex bureaux, which had previously experienced stability following the BoG’s introduction of administrative measures—such as biometric verification and real-time transaction monitoring—are now seeing the dollar rate climb again, from about GH¢16 to GH¢16.40 and above.
Finance Minister Dr. Mohammed Amin Adam recently countered the COCOBOD announcement by stating that the board is still in talks with international lenders to raise $600 million, significantly less than the initial $1.5 billion target. While this may soften market sentiments, analysts do not expect a significant moderation in the cedi’s depreciation unless there is a substantial dollar inflow or sustained intervention by the Central Bank in the coming days and weeks.
