Weakened U.S. Dollar Helps Stabilize Ghana Cedi Amid Forex Market Pressures — Bank of Ghana

The Bank of Ghana (BoG) has confirmed that the recent weakening of the U.S. dollar played a major role in supporting the Ghanaian cedi’s stability, despite continued pressure in the domestic foreign exchange market. The central bank said the softer dollar created favorable conditions for emerging market currencies, including the cedi, helping to cushion its performance through 2025.

According to BoG’s latest Monetary Policy Report for September 2025, the U.S. dollar index fell by about 8 percent between January and August this year. The decline was largely driven by a slowdown in the American labour market and growing expectations of interest rate cuts by the U.S. Federal Reserve. This global trend weakened the dollar’s dominance and created space for stronger performances from other currencies.

The report also highlighted that the increased use of alternative currencies such as the Chinese yuan for global trade and commodity transactions has helped diversify exchange rate dynamics. As a result, many emerging markets — Ghana among them — experienced a rebound in currency strength during the period.

Despite the broader support from a weaker dollar, the cedi still faced mixed conditions locally. Persistent high import demand, reduced foreign exchange supply due to challenges in the Gold-for-Forex programme, and lower remittance inflows all weighed on the currency. Even so, the cedi posted impressive year-to-date 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 — a sharp turnaround from the steep losses recorded in 2024.

Looking ahead, the Bank of Ghana says the cedi’s short-term stability will depend on strong gold prices, improved forex inflows from new mining directives, and disciplined fiscal management. The central bank added that positive investor sentiment following recent IMF programme reviews, along with expected U.S. policy shifts, could further strengthen the local currency in the coming months.

source: citi newsroom