The Ghanaian cedi (GHS) has shown significant resilience and appreciation in recent weeks, strengthening against a basket of major foreign currencies, including the US dollar (USD), British pound (GBP), and euro (EUR). This development marks a notable shift in Ghana’s foreign exchange landscape and offers a renewed sense of economic optimism for policymakers and businesses alike.
As of the second week of May 2025, the cedi has appreciated by approximately 3.8% against the US dollar, trading at GHS 10.72 to $1, compared to GHS 11.14 a month ago. Similarly, the cedi has gained 2.9% on the British pound, moving from GHS 19.11 to £1 to GHS 17.51. Against the euro, the local currency has improved from GHS 14.18 to €1 to a current rate of GHS 11.76, reflecting a 3.5% gain over the period.
Market analysts attribute the cedi’s recent strength to a combination of factors, including prudent fiscal policies, increased foreign exchange inflows, and a more aggressive stance by the Bank of Ghana in regulating the forex market. The central bank’s recent tightening of monetary policy, including maintaining a relatively high policy rate, has also contributed to stabilising inflation and supporting the cedi.
“Investor confidence has improved in the short term due to a better-than-expected performance in key macroeconomic indicators,” said Dr. Linda Asante, an economist at the University of Ghana. “The cedi’s performance is not just a reflection of central bank intervention but also a sign of improved trade flows and reduced speculative pressure on the currency.”
In addition, seasonal factors have played a role. Increased remittances during the Easter period and strong cocoa export revenues have injected fresh foreign currency into the economy, helping boost supply and ease demand-side pressures.
Despite the recent appreciation, analysts caution that structural challenges remain. Ghana continues to grapple with a high debt-to-GDP ratio, external financing needs, and vulnerability to global commodity price shocks. The sustainability of the cedi’s gains will depend on continued fiscal discipline, improvements in productivity, and the diversification of export revenue sources.
Nevertheless, for now, the strengthening of the Ghanaian cedi provides much-needed relief to businesses and consumers affected by imported inflation. Importers have seen reduced costs, and consumers are benefiting from lower prices on foreign goods.
As the government and the Bank of Ghana continue to monitor developments, the coming months will be crucial in determining whether the cedi’s newfound strength can be maintained or expanded.
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