Cedi in Free Fall: BoG’s $8bn FX Programme Fails to Stem the Tide
The Bank of Ghana (BoG) has sold over $8 billion into the foreign exchange market since January 2026 to improve liquidity, meet demand, and support the stability of the cedi. Despite this significant intervention, the cedi continues to face pressure against the US dollar, with the central bank putting the cedi's depreciation at 10.61% as of the end of July.
BoG's $8bn FX Programme Fails to Stem the Tide
The Bank of Ghana has deployed more than $8.2 billion in foreign exchange support this year, with a potential figure of $9.2 billion by the end of August if the Bank proceeds with plans to sell up to $1 billion through its FX Intermediation Programme during the month. This intervention is part of the Bank's FX Intermediation Programme, designed to improve liquidity and help reduce excessive volatility in the foreign exchange market when necessary.
The development comes as the cedi faces renewed pressure against the US dollar, with some market participants attributing the pressure to increased foreign exchange needs from energy sector players financing crude oil imports, finished petroleum products, and payments to power producers. Others have linked the pressure to limited dollar supply relative to demand from businesses.
Demand for Dollars Remains Strong
Data compiled by Joy Business from the Bank's FX auction calendars and market communications show that the central bank sold about $7.45 billion through its FX Intermediation Programme between January and July 2026. The Bank also deployed about $811 million through its FX Intervention Programme between January and June. This takes the total market support to more than $8.2 billion so far this year.
Some market participants have argued that the cedi could have come under even greater pressure without the Bank's interventions. However, the Bank of Ghana has maintained that businesses should not panic, describing the recent movements as temporary market pressures.
Ghana's International Reserves Decline
Recent Bank of Ghana data indicate that Ghana's international reserves have declined to a little over $12 billion. Despite the pressure, the central bank has indicated that it remains capable of supporting the foreign exchange market when necessary and ensuring that critical imports are not disrupted.
The Bank of Ghana's efforts to stabilize the cedi have been met with skepticism by some market participants, who argue that the Bank's interventions are not sufficient to address the underlying issues driving the cedi's depreciation. The pressure on the cedi is likely to continue in the short term, with some market participants predicting further depreciation in the coming weeks.
The cedi's decline is a concern for businesses and individuals relying on foreign exchange to import critical goods and services. The Bank of Ghana's ability to maintain stability in the foreign exchange market will be closely watched in the coming weeks and months.
Source: Joy Online
