The Ghanaian cedi has appreciated by 24.1% against the US dollar in the first five months of 2025, marking a significant turnaround from its previous depreciation.
Economists attribute this surge to deliberate government policies, including fiscal consolidation and monetary tightening.
Professor Godfred Bokpin, a finance expert, commended the government’s efforts, stating, “We’ve seen this government do in five months what we’ve been calling for since COVID.” He highlighted the effective collaboration between the Finance Ministry and the Bank of Ghana as a key factor in the cedi’s appreciation.
The Bank of Ghana’s decision to raise the Monetary Policy Rate by 100 basis points to 28% in March 2025, coupled with aggressive liquidity sterilization, has been instrumental in stabilizing the currency.
Additionally, the government’s expenditure cuts, amounting to over GH¢10 billion less than in 2024, have restored investor confidence and reduced inflationary pressures.
Despite these positive developments, Professor Bokpin cautioned against overreliance on exchange rate manipulation to curb inflation. He emphasized the need to build foreign reserves to protect traders and sustain the cedi’s gains, warning that the current strategy might not be sustainable in the long term.
The Bank of Ghana, while acknowledging the cedi’s appreciation, clarified that it does not have a specific target rate for the currency.
Governor Dr. Johnson Asiama stated that the central bank’s focus is to ensure that exchange rate volatilities do not become excessive.
As Ghana navigates its economic recovery, experts agree that while the cedi’s appreciation is a positive sign, maintaining this momentum will require prudent fiscal management and strategic reserve building to ensure long-term stability.
Source : www.kumasimail.com
