BoG attributes Cedi stability to weakening U.S. Dollar

The Bank of Ghana (BoG) has confirmed that the recent weakening of the U.S. dollar has played a major role in stabilising the Ghana cedi, despite persistent pressures in the domestic foreign exchange market.

According to the Central Bank, the U.S. dollar index fell by about 8 percent between January and August 2025, driven largely by a slowdown in the American labour market and expectations of interest rate cuts by the U.S. Federal Reserve.

In its September 2025 Monetary Policy Report, the BoG noted that the easing dollar, combined with the increased global use of alternative currencies such as the Chinese Yuan for trade and commodity settlements, strengthened several emerging market currencies, including the cedi.

However, the report highlighted that the local currency faced mixed performance during the period, coming under pressure from high import demand and reduced foreign exchange supply, due in part to challenges in the Gold-for-Forex programme and lower remittance inflows.

Despite these challenges, the cedi recorded notable gains, appreciating by 28.95 percent against the U.S. dollar, 19.49 percent against the British pound, and 14.08 percent against the euro on a year-to-date basis, a sharp contrast to the heavy losses recorded during the same period in 2024.

The Bank of Ghana maintains that the cedi’s short-term stability will depend on sustained high gold prices, improved forex liquidity following new directives to mining firms, and continued fiscal discipline.

The Bank added that positive investor sentiment from the recent IMF programme reviews, coupled with further developments in U.S. monetary policy, is expected to support the local currency’s performance in the coming months.