Fitch Pegs Cedi’s Appreciation Rally Against Dollar at 50%
Ghana’s local currency, the cedi, has recorded a stunning 50% appreciation against the US dollar in the year-to-date, making it the world’s best performing currency so far in 2025, according to Fitch Solutions.
The ratings and research firm attributes the cedi’s remarkable strength to a confluence of favourable factors, including surging gold prices, record-high foreign reserves, and improving macroeconomic indicators such as declining inflation.
“The price of gold—already high due to geopolitical tensions and central bank purchases—has increased further due to uncertainty around US President Donald Trump’s trade policies. Our Metals & Mining team forecasts gold prices will average a record USD3,100 per ounce this year, 29.7% higher than in 2024,” Fitch stated.
Ghana, Africa’s largest gold producer, has benefitted enormously from the boom in global gold prices. The rally in bullion has significantly bolstered the country’s external position, pushing gross international reserves to USD7.9 billion as of April 2025—near-record levels.
“This has led to a significant appreciation of the Ghanaian cedi, which strengthened by approximately 50% against the US dollar over April-May, emerging as the world’s best performing currency in the year to date,” Fitch added.
Disinflation and Consumer Boost
The strong exchange rate is also having a ripple effect on domestic inflation. Ghana, as a net importer of key consumer goods such as petroleum products, vehicles, rice and pharmaceuticals, stands to benefit from lower import costs, thereby easing price pressures.
Headline inflation fell sharply to 18.4% year-on-year in May 2025—its lowest since February 2022—driven largely by a reduction in transport-related inflation. Fitch now forecasts that average inflation will fall from 22.9% in 2024 to 17.2% in 2025.
This disinflationary trend, combined with improving consumer confidence, is expected to spur private consumption and drive growth over the remainder of the year.
“Consumer spending will continue to drive growth as a stronger cedi pushes down inflation,” the report noted.
Additionally, falling global energy prices—due to subdued global growth prospects amid protectionist US trade policies and rising OPEC+ output—will reinforce the disinflationary environment, further easing pressure on household budgets.
While structural challenges remain, the cedi’s robust performance and easing inflation outlook signal a period of relative macroeconomic stability for Ghana in the second half of 2025.
