Ghana’s cedi has gained ground against the US dollar as the Ghana Gold Board (GoldBod) supplies more dollars to commercial banks, bringing some relief to a currency market that was under pressure only weeks ago.
GoldBod is targeting $1.5bn in foreign exchange receipts this October, with $1bn intended for banks and up to $500m for the Bank of Ghana’s reserves. The shift matters because more of the money earned from gold exports is being channelled towards businesses looking for dollars to pay their bills overseas.
In an October 22 update, GoldBod said it had sold $130m to commercial banks two days earlier at GH¢11.60 to the dollar. It described the sale as part of a push to ease pressure on the currency.
That followed sales of $197m on October 13 and $85m on October 15, as well as an initial $125m transaction on October 6. Together, those four publicly reported deals amount to approximately $537m.
It is a substantial flow of dollars, but the distinction is important: $1.5bn is the target for the month, not an amount GoldBod has already delivered. Nor does the $537m figure necessarily capture every sale made under the programme.
The agency now offers dollars through its GoFX platform on Tuesdays and Thursdays. Banks submit requests backed by genuine customer demand or a shortage of foreign currency. When requests exceed the dollars on offer, the money is shared proportionately.
The improvement is visible beyond GoldBod’s own statements. Reuters reported on October 22, citing LSEG data, that the cedi was trading at GH¢11.54 to the dollar, compared with GH¢11.63 a week earlier.
The movement is modest, but it follows the strain seen in August and early September, when import payments and demand from the energy sector put renewed pressure on the currency.
Reuters cited Andrews Akoto, head of trading at Absa Bank Ghana, who pointed to mining-related dollar inflows and easing demand from energy and commercial businesses. Ronald Mensah, a trader at Stanbic Bank Ghana, also identified GoldBod’s scheduled sales as a source of near-term support.
That does not make GoldBod solely responsible for the cedi’s gains. Exchange rates respond to many forces, including demand for imports, commodity earnings and market confidence. But putting more dollars within reach of banks is helping to address one immediate problem: limited supply.
For a Ghanaian importer, an exchange-rate chart is not an abstract measure of success. It affects how much a shipment costs, when a supplier can be paid and how confidently a business can set its prices.
The arrangement is also more straightforward than the language of foreign exchange intermediation suggests. GoldBod sells dollars earned from gold trading to banks in exchange for cedis. It can then use those cedis to buy more gold, while banks have additional dollars to meet legitimate customer needs.
The Bank of Ghana still supervises the market and can intervene when necessary. It has not handed over its responsibility for exchange-rate stability.
As Africa Briefing has examined, the allocation has changed noticeably since September. GoldBod said it generated $1.871bn that month, sending $701.3m to banks and $1.17bn to the central bank. October’s plan gives banks a much larger share.
The strategy also draws on Ghana’s stronger gold export earnings, which have become increasingly important to the country’s supply of foreign currency.
There is a cautionary lesson in Ghana’s earlier gold operations. An IMF study published in August found that the Bank of Ghana’s former Domestic Gold Purchase Programme helped rebuild reserves and stabilise the market, but also generated sizeable losses and financial risks.
Those findings concern the previous central bank arrangement, not losses established under GoldBod’s new October sales framework. Still, they explain why the cost of buying gold, the price at which dollars are supplied and the transparency of the operation matter as much as its headline scale.
The issue has featured in earlier scrutiny of Ghana’s gold policy, particularly over how to balance economic support with financial accountability.
Even a steadier cedi will face challenges. Import demand often rises towards the end of the year, while energy payments can draw heavily on available foreign currency. International gold prices can also change, affecting the earnings available to support the market.
For now, GoldBod’s sales have given banks another source of dollars at a time when they need one. The real measure of success will be whether the supply remains dependable, the costs stay under control, and businesses can plan without fearing another sharp swing in the cedi.
