CEDI HITS RECORD HIGH, BECOMES TOP PERFORMER AGAINST MAJOR GLOBAL CURRENCIES

Ghana’s national currency, the cedi, has surged in value against all major trading currencies, achieving its strongest performance in recent history. According to Bloomberg, the cedi recorded a remarkable appreciation of nearly 16% against the US dollar in April 2025, making it the best-performing currency globally during that period.

This impressive rebound comes after a challenging start to the year when the cedi had depreciated by about 2% against major currencies by January. The turnaround is largely credited to a combination of strategic interventions and favorable global conditions.

Key Drivers Behind the Cedi’s Appreciation:

1. Central Bank Interventions:
   The Bank of Ghana took decisive steps by injecting $490 million into the foreign exchange market in April. This move significantly boosted dollar liquidity and helped stabilize the currency.

2. Gold Accumulation Strategy:
   Ghana's central bank made substantial gains in its gold reserves, increasing from around 8.7 tonnes in May 2023 to over 31 tonnes by April 2025. This bolstered investor confidence and added strength to the local currency.

3. Support from the IMF:
   The cedi’s recovery has been supported by a $3 billion Extended Credit Facility from the International Monetary Fund, initiated in 2023. The program has backed economic reforms and improved fiscal management in the country.

4. Weaker US Dollar:
   The global decline in the strength of the US dollar due to changing monetary policies and economic uncertainty contributed to the cedi's relative gain.

5. Improved Forex Reserves:
   Ghana’s gross international reserves rose significantly from $6.2 billion in March 2024 to $9.4 billion in March 2025, providing a solid buffer against external financial pressures.

As of early May 2025, the cedi was trading at approximately GH₵13.82 to the US dollar, a marked improvement over previous rates. This appreciation has also helped ease inflation, with the country’s consumer price inflation dropping to 21.2% in April from 22.4% the month before.

Looking Ahead:

While the cedi's performance is a positive development, experts caution that long-term stability will depend on continued economic discipline, diversification of exports, and further structural reforms. Sustaining investor confidence and maintaining macroeconomic stability will be key to ensuring that the recent gains are not reversed.