Cedi Gains 10.9% against dollar in May amid mixed explanations from experts

The Ghanaian cedi made notable gains against the US dollar in the first half of May 2025, according to data from the Bank of Ghana.

The local currency appreciated by approximately 10.9% between May 2 and May 19, rising from a mid-rate of GH¢13.8 to GH¢12.3.

Further analysis by the Ghana News Agency highlighted fluctuations within the period, noting that the cedi appreciated by roughly 6.1% between May 9 and May 16 alone, strengthening from GH¢13.1 to GH¢12.3.

While these figures reflect a positive trend for the cedi, they also underscore the volatile nature of Ghana’s foreign exchange market. The Bank of Ghana has continued to monitor the situation closely as the currency shows renewed momentum.

The reasons behind the cedi’s rally remain a subject of debate among financial experts and policymakers.

Dr. Zakaria Mumuni, First Deputy Governor of the Bank of Ghana, attributed the cedi’s performance to the Central Bank’s aggressive liquidity tightening measures. “We’ve raised interest rates and implemented strict monetary policies to stabilise the currency,” he explained.

Meanwhile, Dr. Kabiru Mahama, Member of Parliament for Walewale, pointed to other interventions, including a substantial injection of over $492 million into the forex market. He also credited the government’s fiscal restraint in the first quarter of the year as a stabilising factor.

The Ghana International Trade and Finance (GITF), an investment research agency, offered a broader perspective, citing both internal and external influences. According to the GITF, shifts in global investor sentiment—particularly as a result of the ongoing US-China trade tensions—led some investors to offload US assets, indirectly strengthening the cedi.

The agency also noted that the government's Gold for Reserves programme has helped boost Ghana’s international reserves, further supporting the local currency.

Despite the current momentum, analysts warn that sustained stability will depend on maintaining disciplined fiscal policies, effective monetary tools, and favourable global economic conditions.