Explainer: Why the cedi is gaining ground

Ghana’s cedi has unexpectedly rallied after months of calm. From February to April 2025, it stayed around GHS15.50 to the US dollar.

In early May 2025, the cedi surged to GHS13.1. This is its strongest level in a year. The question remains: Is this a lasting recovery or just temporary?

This isn’t the first time the cedi has surprised positively. In late 2022, it briefly strengthened from GHS14 to GHS9 before falling back to GHS12. However, this time is different due to its longer duration of stability.

The recent strength of the cedi is mainly due to rising export earnings. In early 2025, Ghana exported over $2.3 billion in gold, the highest in over ten years.

Gold prices have also hit an all-time high, trading above $3,000 per ounce. As Ghana's largest export, this boost has improved foreign exchange reserves and supported the cedi.

Cocoa exports have also increased revenues from about $600 million to $800 million due to rising global prices.

Together, gold and cocoa have provided essential hard currency for Ghana, easing pressure on the cedi.

This situation involves more than just Ghana; it also relates to the US dollar. President Donald Trump’s trade policies have reduced global demand for the dollar, slightly weakening it.

Domestically, Ghana's government is working to restore investor confidence. It has resisted high interest rate bids in treasury bills and signaled a tougher stance on debt accumulation.

Officially, foreign reserves remain stable. The Bank of Ghana claims it hasn’t intervened directly in the forex market. Its gold reserves have increased to 31.37 tonnes as a buffer against external shocks.

However, there are signs that the central bank may be supporting the cedi quietly. The head of financial stability at the Bank of Ghana noted a GHS490 million cash injection in April aimed at covering energy sector payments.

This cash was used for debts owed to independent power producers and fuel purchases.

Increased remittances and stronger forex inflows from gold, cocoa, and oil are also stabilizing factors for the currency.

The weakening US dollar due to Trump’s trade policies further supports the cedi's strength globally.

The cedi's gains extend beyond just the US dollar as well. The pound fell from GHS20.60 in late April to GHS17.45 now while the euro dropped from GHS17.72 to GHS14.78 during this period.

The Canadian dollar decreased from GHS