If you’ve been tracking exchange rates lately, you’ve probably noticed some exciting news — the Ghanaian Cedi is gaining ground against the US Dollar — a promising sign for Ghana’s economy.
From January to April 2025, the Cedi showed incredible resilience. The year kicked off with the Cedi trading at GHS 14.7–15.0 per USD, dipping slightly to GHS 15.5 by February. But, instead of spiraling down, the currency found its footing, stabilizing in March before making a comeback in April. By month-end, it had soared to GHS 14.15, marking a sharp turn in its performance from depreciation to stability, and finally, growth.
What is behind the cedi’s strength:
- Ghana’s exports surged to $4.3 billion in February 2025, up 50% from last year, driven by strong gold (up 63%) and cocoa (up 126%) exports. Imports rose slightly to $2.67 billion. This led to a trade surplus of $1.6 billion. Ghana’s strong export earnings have boosted foreign reserves and improved the trade balance, helping stabilize and strengthen the cedi against the US dollar.
- The Bank of Ghana’s use of foreign exchange forward auctions has effectively managed currency supply and demand, helping stabilize the exchange rate. For the second quarter, BoG plans to auction $120m. These auctions contribute to the strengthening of the cedi by ensuring that the market has access to foreign currency in a controlled manner.
- Ghana's fiscal and monetary policies are also contributing to the cedi’s strength. Efforts to reduce government spending and lower the fiscal deficit, alongside an increase in the Cash Reserve Ratio by the Bank of Ghana, are tightening liquidity, creating a more stable environment, boosting investor confidence, and supporting the Cedi.
- The global weakening of the US Dollar, driven by factors such as expectations of US Federal Reserve rate cuts and the imposition of tariffs on imports, has created favorable conditions for the Ghanaian Cedi. As the Dollar loses value, Ghana’s exports, like gold and cocoa, become more competitive, boosting demand and strengthening the Cedi. This has led to improved foreign reserves and greater stability for the Cedi against the US Dollar.
What’s next for the Cedi?
With the government's policies, driving this upward trend, the future looks bright for Ghana’s economy. The Cedi’s recent performance is just the beginning, and as the country continues to implement these forward-thinking strategies, we can expect even more stability and growth — all while the world watches in anticipation.
For Ghanaians abroad who send remittances home, these recent developments mean one more thing. A few more dollars will need to be sent for the same value of cedis to family and friends back home in Ghana. They can however continue to count on money transfer businesses such as Jupay to provide the most competitive conversion rates for their transactions.
Sources
- Bank of Ghana. (2025, March 28). Monetary Policy Committee (MPC) press release. Bank of Ghana. https://www.bog.gov.gh/wp-content/uploads/2025/03/MPC-Press-Statement-March-2025-1.pdf.
- Joy Business. (2025, April). Interview with Dr. Johnson Asiama at the IMF/World Bank Spring Meetings. https://www.myjoyonline.com/cedis-stability-against-us-dollar-will-be-sustained-says-bog-governor/.
- Bank of Ghana. (2025). Historical interbank exchange rates. Bank of Ghana. https://www.bog.gov.gh/treasury-and-the-markets/historical-interbank-fx-rates/.
- The Economist. (2025, April 6). Trump takes America's trade policies back to the 19th century. The Economist. https://archive.ph/20250406031919/https://www.economist.com/finance-and-economics/2025/04/03/trump-takes-americas-trade-policies-back-to-the-19th-century.
