The Ghanaian cedi has emerged as one of the best-performing currencies across Africa and among emerging markets this year, recording a remarkable year-to-date gain of over 40% against the U.S. dollar.
From trading above GH₵11.55 per dollar in early 2024, the cedi has appreciated to GH₵10.25 by the close of the latest trading week, according to data from the London Stock Exchange Group (LSEG).
This sharp appreciation has positioned the cedi ahead of other regional currencies like Nigeria’s naira and Kenya’s shilling, which have either remained flat or traded within tight ranges in recent weeks.
Market analysts and currency traders attribute the cedi’s performance to consistent inflows from remittances, increased investor confidence, and active interventions from the Bank of Ghana (BoG).
Remittances and Central Bank Support Drive Momentum
A critical driver behind the cedi’s impressive surge has been the consistent flow of remittances into the country. As Ghanaians abroad send money home, especially during mid-year periods, the foreign exchange supply increases, relieving pressure on the cedi and supporting its value.
Coupled with this has been the Bank of Ghana’s deliberate effort to stabilize the local unit through daily interventions in the forex market. These actions include direct dollar sales to banks, strategic reserve management, and the tightening of monetary policy, all of which have helped anchor inflation expectations and support the cedi.
Sedem Dornoo, a senior trader at Absa Bank Ghana, noted that, “The cedi has remained on the front foot for much of the last week”.
“However, we’ve observed some increased hard currency demand from offshore players in the most recent sessions as they look to take profit from GHS investments.”
Sedem Dornoo
He added that once this temporary demand is cleared, the rally is likely to continue, especially with ongoing support from the central bank.
Cedi’s Performance Stands Out in Regional Context
While Ghana’s cedi continues to trend upward, other major African currencies are showing relative stability without much appreciation. Kenya’s shilling, for instance, traded narrowly around 129.00/50 to the dollar during the past week, with traders forecasting it to remain stable in the near term.
Meanwhile, Nigeria’s naira has remained range-bound between ₦1,580 and ₦1,590 per dollar, supported largely by the central bank’s weekly dollar sales and inflows from portfolio investors.
These contrasting movements highlight Ghana’s unique macroeconomic positioning in the region, driven by renewed confidence in fiscal management, a narrowing current account deficit, and a stable political environment.
Profit-Taking by Investors, a Temporary Setback
Despite the positive outlook, there has been some minor resistance in the cedi’s climb, with offshore investors seizing the opportunity to take profits from recent gains. This increased demand for hard currency has led to short-term pressure, but analysts maintain that this is a normal market response.
“Support around the GH₵10 level looks sustainable for now,” said Dornoo. “Once the offshore demand is absorbed, we expect the cedi to resume its strengthening trajectory, given the underlying fundamentals.”
In the new month, most currency watchers remain bullish on the cedi. The confluence of strong remittance flows, strategic BoG interventions, and improving investor sentiment is expected to sustain the local unit’s momentum in the coming weeks. Furthermore, if inflation continues to decline and Ghana’s economic indicators remain stable, the cedi could even break below the GH₵10 mark against the dollar.
This performance is especially noteworthy when viewed in the context of the global economic environment, where many emerging market currencies are struggling to maintain value amid geopolitical tensions and tightening U.S. monetary policy. Ghana’s ability to outperform in such a climate speaks volumes about the resilience of its financial system.
If current trends hold, the cedi could further solidify its position as Africa’s top-performing currency in 2025 — a development that bodes well for price stability, investor confidence, and overall macroeconomic growth.
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