The World Bank has praised the Bank of Ghana (BoG) for measures that helped the cedi stage a substantial recovery in 2025, while warning that continued pressure in the foreign exchange market could threaten its stability.
In its 10th Ghana Economic Update, the World Bank said the cedi’s real effective exchange rate increased by 28% during the year under review. Its nominal effective exchange rate also rose by 26%.
The report said Ghana’s current account position and exchange rate remained broadly consistent with the country’s economic fundamentals, particularly its status as a commodity exporter.
That improvement was accompanied by a sharp appreciation of the cedi in the second quarter of 2025. However, the speed of the currency’s rise created uncertainty and contributed to a widening difference between the official exchange rate and the rate available on the parallel market.
Between June and December 2025, the average premium on the parallel market was 12.4%.
In response to the pressure, the Bank of Ghana introduced a Foreign Exchange Operations Framework in November 2025. The framework was designed to increase transparency in the foreign exchange market, strengthen the country’s reserves and help manage exchange-rate volatility.
The World Bank said the cedi gained about 29% against the US dollar from January to December 2025. That trend then reversed during the first half of 2026, when the currency depreciated by 8.1% between January and June.
According to the report, the decline was driven mainly by increased demand for foreign currency from the energy sector and dividend payments by private companies. Those pressures came despite strong inflows generated by Ghana’s trade surplus.
The Bank of Ghana has described the depreciation as a normal development within Ghana’s managed floating exchange-rate regime. It also said the difference between the official rate and the black-market rate had narrowed.
The average parallel-market premium fell to 8.1% in the first six months of 2026, compared with 12.4% during the same period considered in the previous year.
Despite the improvement, the World Bank said the remaining premium was still high and indicated that foreign exchange pressures had not been fully resolved.
It said the long-term stability of the cedi would depend on the credibility of economic policy, continued efforts to build stronger foreign exchange reserves and effective management of the forex market.
The World Bank’s assessment acknowledges the impact of the Bank of Ghana’s interventions while also highlighting the challenges facing the currency after its rapid appreciation in 2025.
The report’s findings suggest that, although the cedi remains more stable than during periods of severe market stress, fluctuations in demand for foreign currency and the country’s ability to maintain adequate reserves will remain important factors in determining its future performance.
