The cedi may face renewed depreciation pressures in the coming weeks as rising import demand and a stronger US dollar test the currency’s recent stability, analysts at DataBank have warned.
Expectations of further delays in Fed rate cuts support a stronger dollar, the firm said in a recent market update, cautioning that the cedi could face modest pressure going forward.
“In the coming weeks, we foresee the cedi facing modest pressure as expectations of further delays in Fed rate cuts support a stronger dollar,” DataBank said in a note.
The warning comes as the US Federal Reserve continues to hold interest rates steady, with its benchmark federal funds rate remaining between 4.25 and 4.5 percent. This is anticipated to remain the same at its July 29-30 meeting over inflation concerns. Market consensus on an initial rate cut has now shifted to late fourth quarter 2025 or beyond, a delay that has buoyed the greenback and prompted capital outflows from emerging markets.
The domestic interbank currency market reflected mild weakness over the past fortnight. The cedi closed at a midrate of GH¢10.43 per US dollar, marking a 1.05 percent depreciation. However, it showed relative strength in the retail market, appreciating by 3.36 percent to GH¢11.9 from GH¢12.3.
Improved central bank support helped contain volatility during the period.
“We believe improved FX support by the Bank of Ghana and robust reserves largely contained demand expectations,” DataBank noted, attributing the cedi’s recent resilience to active market intervention and confidence in the central bank’s reserve buffers.
BoG injected an estimated US$1.4billion into FX markets during the first quarter of 2025, according to data from the International Monetary Fund (IMF).
These interventions, primarily aimed at smoothing volatility and addressing seasonal demand spikes, were supported by improved foreign reserve levels which stood at US$11.1billion (4.8 months of import cover) as of June 2025.
“We expect import activities to pick up, fuelling demand for foreign currency in the near-term,” DataBank’s note cautioned. The recovery in consumer demand, coupled with private sector restocking and capital goods imports, is expected to increase pressure on the local currency.
Sterling and the euro also strengthened against the cedi in the same two-week period. The pound gained 5.64 percent to close at GH¢15.95 while the euro appreciated by 5.82 percent to GH¢13.75, reflecting broad-based dollar strength across global FX markets.
While BoG’s continued presence in the market has so far provided a stabilising effect, analysts say the sustainability of this approach may be tested if reserve drawdowns intensify.
“Market expectations and the pace of central bank FX interventions will play a key role in containing volatility,” DataBank added.
