Bank of Ghana Warns Against Dollar Speculation as Cedi Weakens 10%

The Bank of Ghana has urged businesses, banks, and investors to stop speculating in the foreign exchange market. The central bank's warning comes as renewed pressure on the cedi tests Ghana’s recent exchange-rate stability.

Second Deputy Governor Matilda Asante-Asiedu said market participants must align foreign currency transactions with genuine commercial needs. She explained that transactions should not be driven by panic-based expectations of currency depreciation. The cedi depreciated by 0.94% against the US dollar last week. Its year-to-date depreciation against the dollar now stands at 10.14%.

This warning reflects growing concern within policy circles over renewed speculative demand for dollars. Such demand is particularly evident from businesses trying to protect themselves against future currency uncertainty. Speculative hoarding of foreign currency risks distorting market pricing. This increases exchange-rate pressures and undermines efforts to control inflation.

Matilda Asante-Asiedu spoke at the Money Summit in Accra. She stated, “The fundamentals of this economy do not reward speculation against our currency.” She urged all market actors, including banks, importers, exporters, and investors, to transact based on genuine and present needs, not panic. Mrs. Asante-Asiedu highlighted that Ghana’s external buffers remain strong enough to absorb short-term volatility. She also confirmed that foreign exchange reserves continue to improve, supporting monetary stability and market confidence.

The central bank pointed to lessons from 2023. During that year, traders who held foreign currency positions during uncertain periods later suffered losses when the cedi recovered. Mrs. Asante-Asiedu reminded stakeholders, “Those who bet against the cedi and hoarded foreign currency soon found themselves unwinding at a loss as the currency staged one of the world’s strongest recoveries.” The cedi experienced one of the strongest recoveries globally that year.

The Bank of Ghana believes disciplined market behavior is crucial for sustaining recent macroeconomic gains. These gains include easing inflation, stronger reserve accumulation, and improved foreign investor sentiment. This warning is part of the central bank’s wider effort to build trust in Ghana’s economic recovery program. Authorities are working on fiscal consolidation and tighter monetary management under ongoing reform measures.

When businesses and investors rush to buy foreign currency without immediate need, they can worsen exchange rate pressure. This creates artificial scarcity and reduces confidence in the local currency. The Bank of Ghana aims to prevent temporary market volatility from turning into a self-fulfilling currency crisis. Preserving stability requires both sufficient reserves and credible market discipline.