Weakening U.S. Dollar Boosts Ghana Cedi Amid Forex Pressures – Bank of Ghana

The Bank of Ghana says the recent decline in the value of the U.S. dollar has played a major role in supporting the Ghana Cedi, helping to steady the local currency despite continued challenges in the foreign exchange market.

According to the Central Bank, the U.S. dollar index fell by about 8 percent between January and August 2025. This was largely due to a slowdown in the American labour market and growing expectations that the U.S. Federal Reserve would begin cutting interest rates.

In its September 2025 Monetary Policy Report, the Bank explained that the weaker dollar, along with the increasing global use of alternative currencies like the Chinese Yuan for trade and commodity payments, contributed to the strengthening of several emerging market currencies — including Ghana’s cedi.

However, the local currency still faced headwinds during the period, mainly from high import demand and reduced foreign exchange supply. These challenges were linked to issues in the Gold-for-Forex programme and a dip in remittance inflows.

Despite these pressures, 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. This marks a sharp turnaround from the significant losses seen during the same period in 2024.

The Bank of Ghana noted that the Cedi’s short-term stability will rely on maintaining high gold prices, improving forex liquidity through new directives to mining companies, and ensuring continued fiscal discipline.

Additionally, positive investor confidence from the recent IMF programme reviews and shifts in U.S. monetary policy are expected to further influence the Cedi’s outlook in the coming months.