In a dramatic reversal of its fortunes, Ghana’s national currency, the cedi, has surged nearly 50% against the US dollar in 2025, making it the best-performing currency globally so far this year. The currency, which started the year trading near ₵15 to the dollar, has steadily appreciated and is now approaching the ₵10 resistance level.
Investor sentiment has grown increasingly optimistic as Ghana, the continent’s leading gold producer, works to stabilize its economy following a debt default and a prolonged financial crisis. The cedi opened trading on Monday at GH₵10.21, registering a 7% gain from Friday’s close of GH₵10.25 per dollar.
According to Bloomberg data, the Ghanaian cedi is currently the world’s best-performing currency in 2025. This marks a stunning turnaround from 2022, when it was ranked the worst-performing currency after losing more than 55% of its value due to runaway inflation and a sovereign debt crisis.
Central Bank Maintains Hawkish Stance Amid Disinflation
Inflation has been gradually declining, falling to 21.2% in April 2025. Despite this downward trend, the Bank of Ghana (BoG) remains cautious in its approach. Governor Johnson Asiama remarked, “Stability doesn’t mean fixation,” underscoring the need for a dynamic approach to currency policy that preserves Ghana’s export competitiveness while supporting a strong currency.
The surprising strength of the cedi has injected renewed confidence into the economy, though central bank officials continue to temper market exuberance with reminders of the delicate balance required for sustained recovery.
Tight Monetary Policy and Market Reforms Support the Cedi
To reinforce the currency, the BoG has adopted strict monetary policies and actively intervened in the foreign exchange market. In March 2025, the central bank implemented an unexpected 100-basis point hike, raising the benchmark interest rate to 28%. This move aimed to contain inflation and attract foreign investment.
Further reform came in the form of transitioning to spot-market forex auctions, replacing the prior limit-order-based system. This shift has increased dollar access for businesses and curtailed speculative demand in the forex market.
Commodity Windfall Boosts Reserves
Ghana’s robust export performance—particularly in gold and cocoa—has played a pivotal role in the cedi’s resurgence. The nation’s emergence as the sixth-largest gold producer globally has significantly improved its external position. With gold prices soaring from $2,000 per ounce in 2024 to $3,400 in May 2025, export earnings jumped from $7.6 billion in 2023 to $11.6 billion in 2024.
The Gold Board initiative, which mandates that all domestic gold purchases be settled in cedis before export, has tripled the country’s gold reserves from 9 tons in late 2023 to 31 tons. Consequently, Ghana’s foreign exchange reserves reached a record $11.4 billion by March 2025, providing a solid buffer for the cedi.
Additional gains from oil and non-traditional exports contributed to a record trade surplus of $4.3 billion in 2024.
IMF Support and Fiscal Consolidation Drive Investor Confidence
Ghana’s economic turnaround has also been supported by its ongoing three-year International Monetary Fund (IMF) program, which includes a $3 billion bailout. The initiative emphasizes restoring macroeconomic discipline through demand-management policies following the turbulence between late 2022 and 2023.
As part of its fiscal consolidation efforts, the government suspended ₵65 billion in arrears payments and reduced Treasury bill yields from 28% to 15%, easing debt burdens and strengthening investor confidence.
Political stability under President Mahama’s administration, marked by comprehensive economic reforms, has further reassured markets.
Nevertheless, analysts warn that monetary easing could be postponed due to persistent inflation risks and rising utility costs. With inflation still above the BoG’s target band of 6–10%, premature rate cuts could undermine recent gains or provoke renewed pressure on the cedi.
