The Ghana cedi recorded the steepest depreciation among African currencies in the second quarter of 2026, losing nearly 10 percent of its value against the US dollar between March and June, the World Bank has reported.
The decline came amid heightened geopolitical tensions, rising energy costs and increased investor demand for safer assets, which put pressure on currencies across emerging and developing economies.
The World Bank’s October 2026 Africa Economic Update said several African currencies weakened sharply during the period, with the Lesotho loti, Namibia dollar, South African rand and Swazi lilangeni each recording declines of more than six per cent.
It said seven of the 22 countries monitored, excluding the CFA franc zone, recorded maximum currency depreciations exceeding five per cent during the quarter, including Ghana, the Democratic Republic of Congo, Seychelles and South Africa.
The Bank attributed the broader depreciation to heightened geopolitical tensions, particularly conflicts in the Middle East, which triggered immediate pressure on regional foreign exchange markets.
It, however, said much of the pressure had eased by the end of August, with only 10 currencies remaining weaker than their end-February levels.
The development highlights the vulnerability of emerging market currencies to external shocks, particularly when global energy prices rise and investors shift funds towards safer assets.
For net energy-importing economies, higher oil prices increase import bills and demand for foreign exchange, putting additional pressure on reserves and local currencies.
The World Bank also noted that disruptions to supply chains in the Middle East had pushed up the prices of key agricultural inputs, including fertiliser, creating additional imported inflationary pressures for vulnerable economies.
Weaker currencies can further increase the domestic cost of servicing foreign-currency debt, adding pressure to government finances in countries with significant external obligations.
Cedi under renewed pressure
The cedi has continued to face pressure in the foreign exchange market, with its cumulative year-to-date decline against the US dollar reported to have moved beyond 10 percent in recent weeks.
Interbank market data cited in the report showed the currency trading at about GH¢11.62 to the US dollar following a weekly depreciation of nearly 1.4 percent.
The cedi’s performance against other major currencies has been mixed.
It strengthened against the British pound and the euro in wholesale trading, with the pound and euro trading at about GH¢15.40 and GH¢13.24 respectively.
At the retail level, the cedi also recorded modest gains against the US dollar and euro, trading at approximately GH¢11.93 and GH¢13.73 respectively.
It, however, remained weaker against the pound, which traded at about GH¢15.88.
Growth outlook remains intact
Despite the renewed foreign exchange pressures, the World Bank maintained Ghana’s 2026 economic growth projection at 4.8 percent.
The Bank said the projection reflected continued domestic economic activity, rapid disinflation and improved investor sentiment associated with progress in Ghana’s debt restructuring programme.
The divergence between the cedi’s performance and the broader growth outlook suggests that Ghana’s economic recovery remains exposed to developments in international financial and commodity markets.
The latest assessment therefore places renewed importance on maintaining macroeconomic stability and strengthening the economy’s resilience to external shocks.
For Ghana, sustained exchange-rate stability will remain critical to containing imported inflation, managing the cost of external obligations and protecting the purchasing power of households and businesses as the economy navigates the global environment.
