Fitch Solutions revises end-2025 forecast of cedi-to-dollar rate at GH¢13; predicts 12.9% appreciation

Fitch Solutions has updated its end-of-year forecast for the cedi-to-dollar rate. The new projection is GH¢13.0 per US dollar. This is a decrease from the previous estimate of GH¢15.5.

The firm also predicts a 12.9% appreciation against the US dollar in 2025. This assumption is based on the cedi appreciating by 16% between late April and mid-May 2025. Higher gold prices are contributing to this expected appreciation.

The cedi has already appreciated by 16% during this period, according to Fitch Solutions. As a result, they have revised their end-2025 forecast for the Ghanaian cedi to GH¢13.0 per US dollar. They now expect the currency to strengthen by 12.9% over 2025, starting from GH¢14.7 per dollar at the end of 2024.

A stronger cedi will allow the Bank of Ghana (BoG) to consider monetary easing again. Ghana imports many key consumer goods like fuel and pharmaceuticals. A stronger exchange rate will help reduce inflationary pressures.

In March 2025, the BoG raised its policy rate by 100 basis points to 28%. However, easing inflation due to exchange rate gains may lead to a more accommodative stance later in the year.

Fitch expects the BoG to cut the policy rate by a total of 200 basis points in the second half of 2025, ending at 26%. These changes should increase household purchasing power and drive faster spending growth.

Currently, the cedi is trading at about GHS