In a dramatic turn on the currency market, the US dollar fell sharply to GH₵10.80 by midday on Friday, May 23, marking one of the steepest single-day drops in recent memory. The fall represents a significant boost for the Ghanaian cedi, which has been on a steady upward trajectory in recent weeks.
Trading opened with the dollar at GH₵11.60, but within the first 30 minutes, it had declined to GH₵11.38. Another sharp drop followed, taking the rate to GH₵11.22. By midday, Bloomberg trading data showed the dollar selling at GH₵10.80.
Speculation had been building in recent weeks that the dollar could fall to the GH₵10 mark, but few expected the shift to occur so rapidly. The current trend signals deepening confidence in the cedi and weakening demand for the dollar.
On Thursday, the Bank of Ghana (BoG) made a sizeable dollar offering to the market, yet less than half was purchased — a clear sign that the appetite for the US currency is dwindling. Market watchers interpret this as a strong indication that the cedi’s rally may persist in the near term.
The timing of this major shift coincides with the conclusion of the Bank of Ghana’s Monetary Policy Committee (MPC) meeting, with the policy announcement expected to further shape market expectations and reinforce the cedi’s gains.
Analysts believe the cedi is likely to continue its upward momentum into next week. The BoG’s latest data shows Ghana’s foreign reserves standing at 4.7 months of import cover as of end-April, a notable improvement from just three months of cover a year ago.
The local currency’s appreciation, which began in earnest in late March, has been fueled by both domestic and global factors. A stable supply of dollars on the interbank market has forced traders to release their hoarded reserves, putting downward pressure on the exchange rate. The dollar, which traded as high as GH₵14.25 earlier this year, has since dipped to below GH₵10.80 and now trades at rates recorded in 2022.
Globally, investor sentiment toward the US dollar has weakened, in part due to uncertainty over former President Donald Trump’s proposed trade tariffs. Many international investors are shifting capital into safer assets like gold, undermining the strength of the dollar.
Domestically, optimism is rising over Ghana’s economic prospects. The country’s ongoing engagement with the International Monetary Fund (IMF) is expected to yield further disbursements, boosting investor confidence. Meanwhile, policy measures such as the establishment of a Gold Board and efforts to manage fiscal discipline are bolstering trust in the local currency.
