Exchange Rate: US tariff war among key contributors to cedi’s appreciation – Economist 

Recent gains made by the Ghanaian cedi against the US dollar have been attributed to the ongoing tariff war the United States of America has waged against global economies.

A senior lecturer and economist at the Ghana Communication Technology University College (GCTU), Dr Thomas Appiah asserts that the US currency continues to devalue as the tariff war heightens.

The US dollar is selling at GH13.89 per one dollar [as published by the Bank of Ghana] on May 5, 2025, a 2.46% drop from its value at the end of April 2025.

Dr Appiah assesses that the US dollar could drop further should the tariff war persist. He argues that the Ghana Cedi will continue to rebound against the US dollar as the government of Ghana keeps to its fiscal policy.

“Our gross international reserve is about $9 billion, and that could be used to shore up the cedi. Again, the US dollar is devaluing on the international market… certainly resulting from some unfavorable policies Donald Trump is effecting. The tariff war is affecting the dollar. So, while the US dollar continues to fall, our cedi is regaining its value”.

“…then again, the policies implemented by the government are boosting investor confidence in the Ghanaian economy. This is very typical when there is a new political administration in place,” he explained in an interview with Media General’s subsidiary, Connect FM in Takoradi on May 5.

“We are hoping this trend continues, as it would benefit us all,” he added.

Dr. Appiah remarked that the steady drop in fuel prices is indicative of the gains the cedi has made against the global trading currency. He however admitted that the prices of petroleum products have also fallen, “a reason we are seeing a reduction in the price of fuel at the pumps.”

“I am hoping it will come down further in the coming months,” he noted.

Prices of General Goods Remain Unchanged

Despite the cedi’s appreciation, prices of goods on the Ghanaian market remain unchanged. This, Dr Appiah avers, is anticipated in the short run. In his opinion, prices may remain unchanged for a couple of months, as there are a multitude of factors that influence prices of commodities.

He believes some relief would be experienced soon should the cedi and other fiscal conditions remain or improve along the prevailing trajectory.

“It will take some time…sometimes about 3 months for you to feel it in your pockets. Fuel prices are dropping, and so Ghanaians are expecting a drop in transport fares. Transport fares have a rippling effect on prices of general goods, so as soon as that happens, the impact will be felt by all. It is a matter of time. Ghanaians should give the government some time with this,” he urged.

Relatedly, the Ghana Private Road and Transport Union is hesitant about reviewing its fare on transportation. They justify that prices of spare parts remain expensive; hence, it is unwise to review transport fares in the face of recent fuel price drops.

By Abraham Mensah

The post Exchange Rate: US tariff war among key contributors to cedi’s appreciation – Economist  first appeared on 3News.

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