Ghana’s cedi has recorded a notable rebound towards the end of the year, easing some of the currency pressures that have dominated the economic landscape in recent years.
The renewed strength of the local currency has been welcomed by businesses and households, many of whom depend on exchange rate stability for pricing, budgeting and international transactions.
At the beginning of last week, the cedi was trading at about GH¢11.50 to the US dollar, GH¢15.36 to the British pound and GH¢13.47 to the euro on the interbank market. By midweek, it had strengthened slightly to GH¢11.36 against the dollar, GH¢15.31 to the pound and GH¢13.37 to the euro.
The momentum continued into the current week, with the cedi quoted at around GH¢11.11 to the dollar, GH¢15.00 to the pound and GH¢13.08 to the euro. This marks a sharp improvement compared to the same period last year, when the dollar sold at GH¢14.71, while the pound and euro traded at GH¢18.49 and GH¢15.33 respectively.
Economists attribute the appreciation to a combination of factors, including a decline in seasonal demand for foreign currency following festive-related imports, as well as stronger remittance inflows from Ghanaians living abroad.
Improved external sector indicators are also playing a role. Analysts point to a current account surplus and positive developments in the capital and financial accounts as key sources of support for the currency.
While there is cautious optimism that the gains could extend into 2026, experts warn that sustained stability will depend on broader economic conditions, sound fiscal management and policy discipline. Still, many businesses say a steadier cedi could help reduce operating costs and improve confidence in the economy.
Meanwhile, the International Monetary Fund (IMF) has linked the sharp decline in inflation this year largely to the cedi’s unexpected strength. According to the Fund, the currency’s turnaround has been critical in restoring price stability, contributing to inflation falling to 9.4 percent in September, its lowest level in four years, down from 24 percent last year.
The IMF notes that the contrast between the rapid depreciation in 2024 and the gains recorded this year underscores the central role of exchange rate management in shaping Ghana’s inflation outcomes.