Ghana’s Cedi Becomes World’s Best-Performing Currency Amid IMF Aid, Commodity Boom, and Economic Reforms

In 2025, Ghana’s currency, the cedi, has emerged as the top-performing currency globally, appreciating nearly 50% against the US dollar. Starting the year at around ₵15 to the dollar, the cedi has strengthened to close to ₵10, a remarkable turnaround from its poor showing in 2022 when it lost over half its value amid inflation and debt crises. This sharp recovery has renewed investor confidence as Ghana seeks to rebound from economic challenges and debt default.

The Bank of Ghana (BoG) has played a critical role in this recovery by maintaining a hawkish monetary policy despite inflation easing to 21.2% in April. The central bank raised its policy rate to 28% to combat inflation and encourage foreign investment, while shifting to spot-market forex auctions to improve dollar availability and curb speculative behaviors. BoG Governor Johnson Asiama emphasized the need for a balanced approach to maintain currency stability without harming export competitiveness.

Ghana’s booming commodity exports, especially gold and cocoa, have significantly bolstered foreign exchange reserves and supported the cedi. The country’s gold production surged alongside rising global gold prices, increasing export earnings and gold reserves, partly thanks to the Gold Board initiative requiring domestic gold sales in cedis. These gains, coupled with oil and other non-traditional exports, helped Ghana achieve a record trade surplus of $4.3 billion in 2024.

Another pillar of Ghana’s economic revival is the ongoing IMF program, which has provided a $3 billion bailout and pushed for demand-management policies aimed at restoring macroeconomic stability. Government austerity measures and reforms, including reducing Treasury bill yields and halting arrears payments, have eased debt pressures and improved market sentiment. Political stability under President Mahama’s administration has further strengthened investor confidence.

Despite these positive developments, economists remain cautious. Inflation remains above the central bank’s target range, and rising utility costs pose risks. The BoG is expected to delay monetary easing to avoid reigniting inflation or speculative currency attacks, underscoring the need for a careful and dynamic policy approach as Ghana continues its recovery journey.

Source: Nairametric