Cedi’s Surge: Unpacking Ghana’s Currency Strength in 2025

In 2025, the Ghanaian cedi has emerged as one of the world’s best-performing currencies, appreciating approximately 16% against the US dollar and contributing to a decline in inflation to 21.2% by April . This remarkable turnaround follows a turbulent 2024 when the currency depreciated by nearly 24%, fueling economic instability and eroding purchasing power.

Key Factors Behind the Cedi’s Appreciation

1. Bank of Ghana’s Strategic Interventions
   The Bank of Ghana (BoG) has played a pivotal role in stabilizing the cedi. In April 2025, the central bank injected US$490 million into the foreign exchange market, easing demand pressures and meeting forex needs . Additionally, BoG’s Gold4Oil and GoldBod initiatives have been instrumental, increasing gold reserves by 40.6% from May 2024 to April 2025, thereby strengthening Ghana’s foreign exchange buffer .
2. Improved Fiscal Management
   The government’s fiscal reforms under the IMF program have significantly contributed to the currency’s recovery. The elimination of distortionary taxes like the E-levy and the intent to abolish the COVID-19 levy, combined with prudent expenditure cuts, have enhanced fiscal credibility .
3. Global Economic Factors
   Internationally, the weakening of the US dollar due to various factors, including trade policy uncertainties and fiscal concerns, has indirectly benefited the cedi. The US dollar fell by more than 1% relative to a basket of other currencies, reaching its lowest level in three years, compounding an almost 10% slide since the start of the year .

Conclusion

While the appreciation of the cedi is a positive development, experts caution that it may not be solely attributed to the current administration’s policies. A combination of strategic interventions by the Bank of Ghana, improved fiscal management, and favorable global economic conditions have all played significant roles. As Ghana continues to navigate its economic landscape, sustaining this momentum will require continued prudent policies and adaptability to both domestic and international economic shifts.

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