GHANA'S CEDI HOLDING STRONG-BUT FOR HOW LONG?

The Ghanaian cedi has demonstrated surprising resilience in early 2025, recording a 2.76% appreciation against the US dollar from January through April, according to data from the Bank of Ghana. This strong performance stands in contrast to the cedi’s historical trend of depreciation and instability.

Analysts suggest that this newfound stability stems from a mix of improved fiscal management, increased inflows from remittances and the mining sector, and proactive market interventions by the central bank. A recent example includes the Bank of Ghana’s $20 million foreign exchange injection to support Bulk Oil Distribution Companies, aimed at easing pressure on the local currency.

Despite the optimism, some economists urge caution. They point to external risks such as a stronger US dollar, potential delays in financial support from global institutions like the IMF and World Bank, and upcoming debt and energy sector payment obligations—all of which could undermine the cedi’s current momentum.

While some forecasts predict the cedi may end the year around GH¢17.70 to the dollar, this outcome hinges on the government’s ability to maintain fiscal discipline and secure necessary foreign aid.

The current stability, though encouraging, may be either the beginning of sustained recovery or just a temporary pause before renewed volatility.