Research and Policy Analysts, Africa Policy Lens (APL) has highlighted factors that have accounted for the significant appreciation of the Ghanaian cedi in the year 2025, making a notable turnaround after a difficult 2024.

According to APL, the cedi has appreciated by over 20% against the US dollar so far this year, making it one of the best-performing currencies globally. As of mid-May 2025, the cedi is trading at approximately GH¢13.5 to the dollar, reflecting a 17% gain since January.

APL attributes this recovery to a combination of factors including the government's fiscal consolidation measures like a sharp reduction in public spending, suspension of new projects, and a freeze on the clearance of arrears which have helped reduce pressure on the currency. “The Ministry of Finance is reported to have held back payments worth about GH¢69 billion pending audit,” APL stated, “effectively curbing excess demand for foreign exchange.”

At the same time, the Bank of Ghana (BoG) has played a central role through strategic interventions. Through the Domestic Gold Purchase Programme (DGPP), the BoG accumulated gold reserves that were later used to support the cedi via gold-backed foreign exchange operations. Between January and May 2025, the central bank injected nearly $1 billion into the forex market. “This included $490 million in April alone and $264 million in March,” APL noted, “which helped improve dollar liquidity and ease depreciation pressure.”

In a press statement issued on Tuesday, May 27, 2025, APL notes that while these interventions have brought short-term stability, their sustainability remains uncertain. “Drawing down reserves and delaying payments are not long-term solutions,” the think tank stressed. APL also acknowledges the influence of external factors such as the weakening of the US dollar amid global trade tensions, which have contributed to the cedi’s recent gains.

Despite the progress, APL warns that short-term gains should not lead to complacency. The group emphasizes the need for continued reforms, urging the government to build on current momentum with permanent policy measures aimed at fiscal discipline, export diversification, and institutional transparency. “Short-term gains should not lull policymakers into inaction,” APL cautioned. “Sustainable growth depends on deep, structural reforms.”