Recent cedi appreciation a combination of domestic and external factors — Prof Quartey

The Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has attributed the recent appreciation of the Ghana cedi to a mix of both domestic and external factors.

He explained that policies such as the gold-for-reserves initiative and global developments, including ongoing trade tensions involving the United States and other countries, have influenced the currency’s performance.

“There are a combination of factors, both domestic and external. Domestically, we have seen the gold-for-reserves policy helping. Externally, the dollar has been weakening due to global geopolitical tensions between the US, China, and other countries — including the tariff war,” Prof Quartey said.

Speaking on the sidelines of MIASA’s Cash in Crisis in Africa conference in Accra on Tuesday, May 20, where he served as chairperson, Prof Quartey added that Ghana’s improved fiscal discipline is also playing a key role.

“We are not spending more than we raise in revenue. If we were running excessive deficits, we would have to borrow, which puts pressure on interest payments. We are not doing that currently,” he noted.

He further pointed to the strengthened collaboration between the Bank of Ghana and the Ministry of Finance as a confidence booster for the market.

“I think there is more coordination now between the central bank and the Ministry of Finance. The Bank of Ghana is more engaging, explaining things to the public, and implementing key reforms. When that happens, people gain confidence in the local currency, and that helps strengthen the cedi,” he noted.

Commenting further on the international front, Prof Quartey said efforts to mend ties between major economies could stabilise global markets.

“Gradually, the US is striking agreements with China and other nations. So we’re going to see some stability in the coming days. We should continue doing what we’re doing domestically to keep the cedi strong — otherwise, depreciation could return,” he advised.

Meanwhile, research firm Fitch Solutions has predicted that the local currency may efd the year with a selling rate of GHS15.50--weaker than how it ended 2024.