The Bank of Ghana (BoG) has sold $20 million to Bulk Oil Distribution Companies (BDCs) at the exchange rate of GH¢14.1958 to US$1. This suggests a cedi depreciation of 2.3% from the last auction in April 30 where the exchange rate was GH¢13.8643. The sale is a forward contract that will be settled in 30 days.

The range of bids received by the central bank were from GH¢13.2/US$1 to GH¢14/US$1 but the BoG sold at higher than the highest bids. Ghana’s currency is under pressure from inadequate forex inflows despite receiving about $1 billion in IMF, World Bank and other development partners in 2024.

The country’s large fuel import bill, which reached almost US$4.5 billion in 2023 is a major drain on forex reserves. BDCs are likely to seek further forex on the open market as $20 million is a far cry from the $375 million they average in monthly imports.

Ghana’s economic hopes rests on a deal being arranged with commercial creditors to restructure over $13 billion in debt and accumulated interest on defaulted repayments since the end of 2022. Fears of fiscal slippage are also high as the government is heading into a keenly contested election. Investors are counting on Finance Minister, Dr Amin Adam’s word to control spending regardless of political pressure.