Ghana Cedi Strengthens Slightly to GH¢15.96 per Dollar Amid Reduced Demand

The Ghanaian cedi recorded a slight appreciation against the US dollar last week, buoyed by reduced demand pressure and improved market liquidity. The local currency gained 0.63% on a week-on-week basis, closing at GH¢15.96 to the dollar. This performance helped narrow its cumulative depreciation since the start of the year to 1.74%.

The modest strengthening of the cedi came amid a relatively stable foreign exchange market. Analysts attributed this to reduced demand for foreign currency and effective liquidity management by the Bank of Ghana.

Throughout the week, the central bank maintained its presence in the forex market, offering a total of US$190 million through its daily auctions. However, market participants absorbed only US$84.80 million, representing an acceptance rate of 44.6%. This underscored a subdued appetite for the dollar, easing pressure on the local currency.

In addition to the central bank’s interventions, trading activity on the interbank market also supported cedi stability. A total of US$65 million changed hands on the interbank platform, further boosting liquidity and confidence in the currency’s short-term outlook.

Thanks to these factors, the cedi emerged as the best-performing currency among a group of 15 Sub-Saharan African currencies tracked on the interbank market last week, recording a 6.6% appreciation against the US dollar over the period.

As the new week began, the local unit opened flat against the greenback, maintaining its previous closing rate. Market analysts view this as a sign of relative calm, noting that the cedi may be entering a phase of short-term stability if current conditions persist.

Looking ahead, currency experts expect the cedi to benefit from continued moderation in forex demand, particularly if the Bank of Ghana sustains timely interventions in the market. These factors, coupled with a steady inflow of foreign exchange through official and interbank channels, are likely to support further currency stability.

Analysts believe that while external risks such as global interest rate trends and commodity price volatility still pose potential headwinds, the short-term outlook for the cedi is cautiously optimistic. With inflation gradually easing and the fiscal environment showing signs of improvement, market participants are likely to remain confident in the local currency—at least in the near term.

The Bank of Ghana’s proactive stance has been widely acknowledged as critical to curbing excessive volatility in the forex market. By carefully calibrating its auction volumes to match market demand, the central bank appears to have succeeded in keeping speculative activity in check while preserving overall liquidity.

For now, all eyes remain on economic data and any policy announcements that could impact investor sentiment and capital flows. Barring any unexpected shocks, the Ghana cedi is expected to hold relatively firm against the US dollar this week.