Cedi depreciates 8.4% against dollar as inflation falls to 3.4% – Bank of Ghana data

The Ghana cedi recorded a year-to-date depreciation of 8.4 per cent against the United States dollar by mid-May 2026, even as macroeconomic stability continued to take hold and inflationary pressures eased to their lowest levels in years, according to the latest Summary of Economic and Financial Data released by the Bank of Ghana on May 19, 2026.

The local currency traded at GH¢11.4125 to one US dollar in the first week of May, weakening from GH¢10.95 at the end of January. Against the British pound, the cedi depreciated by 7.5 per cent year-to-date, trading at GH¢15.2055 to the pound, while against the euro, the cedi also recorded a 7.5 per cent depreciation, closing at GH¢13.2695.

The Real Effective Exchange Rate, which measures the cedi's value against a basket of trading partner currencies adjusted for inflation, stood at 93.5 in April 2026, indicating that the currency remains broadly competitive despite the nominal depreciation.

Inflation hits 3.4 per cent in April

Consumer inflation continued its downward trajectory, falling to 3.4 per cent year-on-year in April 2026, up marginally from 3.2 per cent in March but still within striking distance of the central bank's single-digit target band. Food inflation stood at 2.2 per cent, while non-food inflation rose slightly to 4.2 per cent.

The disinflationary trend has been driven by base effects from the previous year, stable exchange rates, and tight monetary policy. The Monetary Policy Rate was reduced to 14.0 per cent in April 2026, down from 15.5 per cent in January and sharply lower than the 28.0 per cent rate recorded in April 2025.

Monthly inflation remained subdued, with April recording a 0.9 per cent increase in consumer prices, driven by a 0.8 per cent rise in food prices and a 1.1 per cent increase in non-food prices.

Gold and oil prices diverge

International commodity prices presented a mixed picture. Gold prices surged 9.4 per cent year-to-date to US$4,724.10 per fine ounce in April 2026, providing strong support to Ghana's export revenues. The realised gold price averaged US$4,466.20 per ounce, up 6.7 per cent for the year.

Brent crude oil prices rallied sharply, climbing 67.4 per cent year-to-date to US$103.20 per barrel in April, raising concerns about potential imported inflation and additional pressure on the cedi from higher fuel import bills. The realised crude oil price stood at US$110.70 per barrel.

Cocoa prices continued their long-term decline, falling 43.2 per cent year-to-date to US$3,350.10 per tonne, as global supply conditions improved following two years of production shortfalls.

Interest rates fall across the curve

The Bank of Ghana's policy rate reductions have fed through to the broader economy, with the average lending rate falling to 16.33 per cent in April 2026, down from 27.40 per cent a year earlier. The 91-day Treasury bill interest rate fell to 4.90 per cent, while the 182-day and 364-day bills traded at 6.84 per cent and 10.02 per cent respectively.

The interbank weighted average rate declined to 10.36 per cent in April, reflecting improved liquidity conditions in the banking system.

External reserves remain adequate

Gross international reserves stood at US$13.95 billion in April 2026, sufficient to cover 5.5 months of import cover, well above the conventional adequacy benchmark of three months. Net international reserves were recorded at US$10.99 billion.

The country's total public debt stood at GH¢674.1 billion as of March 2026, equivalent to 42.2 per cent of GDP. External debt accounted for GH¢313.6 billion (19.6 per cent of GDP), while domestic debt stood at GH¢360.4 billion (22.6 per cent of GDP).

Stock market rallies on favourable conditions

The Ghana Stock Exchange Composite Index surged 72.5 per cent year-to-date to 15,130.5 points in April 2026, reflecting renewed investor confidence in the economy. Market capitalisation rose to GH¢281.8 billion, up 63.8 per cent since the beginning of the year.

The GSE Financial Stock Index performed even more strongly, gaining 90.2 per cent year-to-date to 8,839.4 points, as banking sector stocks continued their remarkable recovery following the Domestic Debt Exchange Programme.

Mobile money transactions surge

Mobile money transaction values reached GH¢493.2 billion in April 2026, with 967 million transactions processed during the month. Registered mobile money accounts grew to 83 million, with 26 million active accounts. The value of mobile money interoperability transactions stood at GH¢5.8 billion for the month.

Outlook

The sharp depreciation of the cedi, combined with the dramatic rally in crude oil prices and persistent weakness in cocoa revenues, presents ongoing risks to the external accounts. However, the continued decline in inflation and the reduction in interest rates provide a favourable backdrop for private sector credit growth and economic expansion.

The Bank of Ghana's next monetary policy committee meeting will be closely watched for signals on the future direction of interest rates and any potential interventions to stabilise the local currency.