Databank Research Sees Cedi Ending 2026 at GH¢12.85, Projects 7.2% Depreciation

Investment firm Databank Research is forecasting a relatively stable Ghana cedi in 2026, projecting a 7.20% year-end depreciation against the US dollar.

Under its 2026 Economic Outlook, the cedi is expected to close the year at approximately GH¢12.85 to one US dollar, assuming no major systemic shocks disrupt the market.

Gold-Backed Inflows Anchor Stability

The forecast is built around conservative but steady inflows from the government’s gold purchase initiative, GOLDBOD, estimated at about GH¢750 million monthly.

According to the report, these gold-backed inflows are expected to:

• Support foreign exchange liquidity

• Strengthen reserve buffers

• Enable the Bank of Ghana to manage market expectations

• Smooth volatility in the foreign exchange market

Reforms within the small-scale mining sector are also expected to sustain gold supply and reinforce reserve accumulation efforts.

Demand Pressures Remain Manageable

Databank’s outlook factors in anticipated foreign exchange demand from:

• Bulk importers

• Energy sector payments

• Eurobond servicing obligations

Despite these pressures, tighter foreign exchange regulations and improved reserve buffers are expected to absorb moderate demand without triggering sharp currency depreciation.

IMF and World Bank Support

The report also points to continued programme backing from the International Monetary Fund and the World Bank as key pillars of favourable investor sentiment.

Sustained external support is expected to:

• Reinforce policy credibility

• Improve investor confidence

• Stabilize capital flows

Global Gold Shift Could Reshape Currency Dynamics

Beyond domestic reforms, Databank highlighted emerging global discussions around reducing reliance on the US dollar as a reserve currency.

The report noted that China is leading a shift toward higher gold holdings amid uncertainties surrounding US policy, with broader conversations within BRICS about potentially reclassifying gold from Tier 1 to High-Quality Liquid Asset (HQLA) status.

If implemented, such a structural change could:

• Strengthen gold’s role in the global financial system

• Reduce US dollar dominance

• Support reserve accumulation strategies in gold-producing countries like Ghana

However, Databank describes this scenario as low probability in the near term, citing concerns over volatility, custody arrangements, and trust constraints.

Neutral-to-Positive Outlook

Excluding the global gold reclassification scenario, Databank maintains a neutral-to-positive outlook for the cedi in 2026.

The key assumptions remain:

• No external systemic shocks

• Continued reform momentum

• Stable gold-backed reserve inflows

• Disciplined foreign exchange management

If these conditions hold, the projected GH¢12.85 year-end rate would represent manageable depreciation within historical norms, signaling relative currency stability after recent years of volatility.

Source: Accra Business News