Cedi on the Rise, Trust on the Line

The cedi, Ghana's currency, has appreciated recently. It strengthened from over GHS¢15.00 to about GHS¢13.29 per US dollar by early May 2025. This positive trend results from coordinated efforts by various institutions. The Bank of Ghana implemented a tight monetary policy. The Ministry of Finance maintained fiscal discipline, and forex inflows increased from exports and development partners.

Ghana Goldbod has also contributed through strategic gold exports. These actions have helped boost the supply of foreign exchange.

However, a video has sparked national discussion. It shows a senior public official giving US dollars to a private individual. While this may have been a private gesture, it raises concerns about foreign exchange handling. This is especially important during monetary tightening and forex conservation.

From an economic policy perspective, circulating foreign currency outside regulated channels can be risky. Public figures accessing forex in non-transparent ways can undermine recent gains. This creates a perception of leakage where hard currency bypasses the banking system. Such actions can erode reserve-building efforts and weaken the cedi's appreciation sustainability.

Exchange rate stability relies on market fundamentals and public confidence. Foreign investors and businesses respond to how state actors manage forex resources. Inconsistencies among those responsible for economic stewardship can create uncertainty. This reduces investor confidence and increases speculative pressures.

It is crucial to align public conduct with economic policy goals. Strengthening foreign exchange discipline among officials enhances fiscal and monetary credibility. This ensures that the cedi's current appreciation is maintained sustainably.

While one incident won't crash the currency, repeated occurrences can make the cedi more vulnerable to depreciation.