By: Anthony Kwesi Ashun, Finance Expert & Advisor
Anthony Ashun, a finance expert and advisor has given his succinct, yet informed analysis on the recent wonders of the Ghanaian cedis over the dollar.
He has stated that, in the past few weeks, one of the currencies that has performed well in the foreign exchange market is the Ghanaian cedi. According to Bloomberg, the currency was named the world’s best-performing currency in May 2025, after appreciating by nearly 16 percent against the US dollar. For the past three years, the Ghanaian currency has been known for its high volatility and persistent loss of value. For a currency long known for its weak international performance to regain upward momentum and begin to outperform currencies like the U.S dollar, it has sparked widespread debate among the general public, government circles and the financial markets. This article explores factors that have enhanced the upward momentum of this currency.
WHY THE GHANAIAN CEDI IS APPRECIATING.
The government’s initiative to increase interest rates has been a key determinant of the appreciation of the Ghanaian cedi. A higher interest rate attracts foreign investors as they always seek to invest in a country where they can have a higher yield on their investment. This move has placed a higher demand for the Ghana cedi which enables it to gain optimum momentum over other currencies. The Bank of Ghana increased its interest rate to 28% on 28th March 2025; a 100-basis points difference from its previous interest rate. This initiative has caused the Ghanaian Cedi to skyrocket. Investors have found it attractive to do business in the country, inflation has begun to decrease, and savings are becoming more attractive. Taking a closer look at the foreign exchange market chart, the records are clear that the Ghana cedi began to appreciate after this interest rate increment was implemented in March 2025.
The cedi appreciated significantly, strengthening from GHS 15.45 to GHS 11.03 — a 28.60% increment as at 24th May, 2025.
Anthony has also stated that the establishment of the GoldBod has been the secret weapon of the cedis appreciation. The Ghana Gold Board (GoldBod) is the sole authority with exclusive right to buy, sell, weigh, grade, assay, value and export gold and other precious minerals in Ghana. The Ghana Gold Board functions under the oversight and supervision of the Ministry of Finance of the Republic of Ghana.
The Ghana GoldBod is a government initiative that regulates gold trade, curbs smuggling, boosts revenue, and ensures transparent, legal gold exports to strengthen the country’s economy. The GoldBod is a central agency that improves the reputation of our gold mining through value addition, responsible sourcing and traceability. That prevents majority of our gold from being smuggled out of our country. As gold passes through the right channel of trading, we earn more forex, there is greater transparency and tax revenue leading to gains on revenue. Ghana’s gold reserve has increased as a result of the country’s strategic focus on economic stability. The reserve has grown from 30.5 tons as of December 2024 to 31.37 tones as at April 2025. Ghana’s cedi appreciation is also tied to the Goldbod activities because it has increased the export of Gold through its strategic channels and proper regulations in trading. This has in turn increased the country’s revenue. Owing to the fact that it is the sole trader of her gold; there is not enough chance for private traders to trade gold illegally and evade taxes as well. Once the gold is sold in its full capacity, there is a higher foreign exchange inflow, a strong current account balance and the cedi appreciates. This is due to the higher supply of forex into the country. As Ghana receives more forex through its gold trading through GoldBod, the supply of dollars in the market increases. This means that the country’s demand for the dollar decreases whiles the local currency (the cedi) gains value. As more foreign currency comes into the country, the cedi will eventually appreciate, and that is what is impacting the Ghanaian Cedi now.
Finally, Anthony reveals that the rapid rise of money transfers from the diaspora (remittance growth) has strengthened Ghana’s foreign exchange reserve. Foreign currencies like US dollars, pounds and euros converted into cedi through the banks, money transfer apps and forex bureaus has increased the supply of foreign currencies in the local market thereby reducing the pressure on the Ghana cedi. This has been undoubtedly one of the factors leading to the unprecedented appreciation of the Ghanaian Cedi.
In conclusion, intentional policy actions and structural reforms targeted at restoring macroeconomic stability reflect the current appreciation of the Ghanaian cedi.
Anthony draws attention to the fact the improved regulations in the gold sector through the GoldBod establishment, strategic interest rate hike and the high remittance inflows have boosted investors’ confidence and has increased the supply of foreign exchange in the local market.
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