Cedi Surges in Value, Hits GH¢15.40 to the Dollar

The Ghanaian cedi made a surprising and significant gain against the US dollar on Tuesday, April 29, 2025, trading at GH¢15.40 per dollar in the retail forex market. This marks a notable improvement from the previous day’s rate of GH¢15.75, indicating a sharp rise in the cedi’s value and lifting investor sentiment.

The latest movement reflects a 3.5% gain in the local currency’s value since the beginning of the year, signaling renewed momentum after a long period of depreciation. While the precise reasons for the sudden appreciation remain unclear, forex market observers have attributed the development to various factors, including a sharp decline in demand for the US dollar.

Some dealers suggest that the subdued demand for dollars may be the result of slowing imports or improved foreign exchange availability. Others believe the recent gains may be underpinned by the robust foreign reserves accumulated by the Bank of Ghana under its previous leadership, estimated at nearly US$10 billion. These reserves are thought to be providing a strong buffer and boosting confidence in the cedi’s near-term stability.

Interbank Market Shows Stronger Gains

On the official interbank market, the cedi is performing even better, with quotes showing an exchange rate of GH¢14.38 to one US dollar. The stronger interbank rate indicates improved liquidity and reflects more controlled market conditions compared to the retail segment, which often experiences greater volatility.

The appreciation trend began gaining traction last week when the cedi posted a weekly gain of 0.63% against the US dollar. Analysts point to a weakening in dollar demand and sustained liquidity in the foreign exchange market as key contributors to the currency’s improved standing.

According to data from the Bank of Ghana, the central bank offered US$190 million in its weekly foreign exchange auctions, but only US$84.8 million was taken up by market participants, representing an acceptance rate of just 44.6%. This low uptake suggests that buyers were either already well-stocked or expecting further improvements in the cedi, resulting in reduced urgency to convert to dollars.

In addition, the interbank market saw a total of US$65 million exchanged during the week, further increasing dollar availability and relieving pressure on the local currency.

Best Performer Among Peers

The Ghanaian cedi emerged as the top-performing currency among a group of 15 Sub-Saharan African currencies tracked on the interbank market. It registered a 6.6% gain against the US dollar over the past week—an impressive turnaround that has not gone unnoticed by analysts and regional investors.

The cedi’s strong performance offers a glimmer of hope for an economy that has been under stress from inflationary pressures, debt concerns, and currency volatility. A firmer exchange rate eases pressure on import costs, potentially helping to stabilize prices and restore purchasing power to households and businesses.

Uncertainty Remains Despite Gains

Despite the recent appreciation, some market experts have cautioned against overconfidence, noting that exchange rate stability in Ghana often depends on a combination of fiscal discipline, investor confidence, and external economic conditions.

While the recent gains are a welcome relief, the sustainability of the rally will likely hinge on continued foreign exchange inflows, careful management of reserves, and ongoing engagement with international financial institutions. Any sudden shifts in global commodity prices, US monetary policy, or domestic economic policy could reverse the cedi’s progress.

For now, however, the Ghanaian currency appears to be on a solid footing, supported by lower demand pressures, ample liquidity, and more positive market sentiment.

If current trends continue, the cedi could consolidate its gains further, offering much-needed stability for the country’s macroeconomic environment. Businesses, consumers, and policymakers alike will be closely monitoring the next moves by the Bank of Ghana to ensure that this progress is sustained.