The Ghanaian cedi continued its upward trajectory on Tuesday, May 6, 2025, as the US dollar dropped sharply to GH₵13.50 on the interbank market by 10:00 a.m., compared to GH₵13.90 the previous day. This marked one of the cedi’s strongest performances in recent months.
Market sources told The High Street Journal that the Bank of Ghana (BoG) offered approximately $52 million to the market on Monday, May 5. However, only $16.4 million—just 31.5% of the offer—was taken up by dealers, indicating significantly reduced demand for the dollar. Nearly 70% of the dollar supply went unsold, a stark contrast to past periods when over $100 million could be absorbed in a single day without halting the cedi’s slide.
Currency traders attribute this subdued demand to growing market anticipation that the dollar could fall further. Some are forecasting that the exchange rate might reach GH₵12 by the end of the week.
Several factors have been credited for the cedi’s renewed strength. A critical one is the Central Bank’s increased gold reserves. As of May 31, 2023, Ghana’s gold reserves stood at 8.78 tonnes but have since surged to over 31 tonnes by March 2025. With the global price of gold also rising, the BoG has seen a windfall in the value of its holdings, giving it greater financial muscle to intervene in the forex market effectively. The recent establishment of the Gold Board is expected to further consolidate Ghana’s gold strategy and improve currency stability.
Another factor contributing to the cedi’s resilience is the weakening strength of the US dollar globally. Uncertainty surrounding trade policies, particularly reactions to former President Donald Trump’s controversial tariffs, has negatively impacted the dollar’s performance on international markets.
In response to the cedi’s consistent gains, many currency traders are offloading their dollar reserves to avoid potential losses. Meanwhile, businesses that typically set their prices in US dollars are adjusting pricing strategies to hedge against potential revenue declines, further reducing dollar demand.
Consumers are closely watching developments, hopeful that the cedi’s appreciation will lead to a drop in the prices of imported goods, which are highly sensitive to foreign exchange fluctuations.
Governor of the Bank of Ghana, Dr. Johnson Asiama, has reiterated his optimism, declaring that the era of excessive cedi volatility may be coming to an end. “We have been very intentional about managing the cedi,” he said, crediting the BoG’s disciplined and strategic foreign exchange policies for the recent improvements.
However, analysts remain cautiously optimistic. While the gains are encouraging, they caution that sustainability will depend on a mix of internal discipline—such as prudent fiscal management—and external variables including global commodity prices and geopolitical developments.
As the market continues to watch closely, all eyes will be on whether the cedi can maintain its momentum and translate currency strength into lasting economic relief for Ghanaians.
