Editorial: Cedi finding its “true value”…

After a brief period of volatility over the past two weeks, the local currency strengthened with the cedi interbank rate closing at GH¢12.17 – up 1.93% from GH¢12.40. The euro and pound sterling closed at GH¢16.25 ( 2.32%) and GH¢14.14 ( 2.55%) respectively.

At the close of trading on October 13, 2025, the local currency appreciated to below GH¢12 per US dollar – its strongest level since September 8, 2025.

Analysts attribute the rebound to a combination of foreign exchange inflows from commodity exports, confidence following the fiifth IMF review and enhanced market operations by the central bank.

Trading data from the Bank of Ghana (BoG) showed that the interbank market opened on October 14 with buying and selling rates of GH¢11.8941 and GH¢11.9060 to the dollar respectively.

This marks a reversal from its October 3 low, when the cedi traded at GH¢12.5437 (buying) and GH¢12.5563 (selling). This represents a nearly 5 percent recovery within ten days. The local unit faced renewed pressure in August on account of year-end imports, payables and speculation.

BoG has over the past quarter intensified its liquidity management efforts, supplying targetted volumes of foreign currency to ease volatility while preserving overall reserve adequacy.

These market-neutral interventions are designed to match demand without distorting exchange rate dynamics.

Meanwhile, DataBank Research said its earlier expectations of a stronger cedi, “driven by seasonal foreign exchange inflows from commodity exports and sustained market support”, have largely materialised.

The rise in gold price, now above US$4,000 per ounce, has bolstered export receipts and improved the overall balance of payments outlook.  Improved investor sentiment following the IMF’s fifth review mission has also contributed to the recovery.

The mission’s endorsement of Ghana’s reform programme and anticipated disbursement of additional funds have reinforced policy credibility and eased speculative demand in the foreign exchange market.

Given these factors, analysts remain cautiously optimistic.

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