Ghana’s macroeconomic landscape is witnessing a significant shift as the Ghanaian cedi posts an unexpected rally, prompting Fitch Solutions to revise its exchange rate and monetary policy outlook for the rest of 2025.
The cedi, which appreciated by 30% between late April and May 2025—largely due to rising global gold prices—has led Fitch to adjust its end-of-year forecast from GHS15.5/USD to GHS13.0/USD. This signals growing confidence in the local currency’s near-term stability.
According to Fitch, the currency’s strength is likely to play a pivotal role in cooling inflation, improving consumer purchasing power, and enabling the Bank of Ghana (BoG) to pivot from tightening to easing monetary policy. The revised projection anticipates a 12.9% appreciation in the cedi by year-end, compared to GHS14.7/USD at the close of 2024.
With Ghana being a major importer of essential goods such as fuel, pharmaceuticals, plastics, and cereals, the firm believes a stronger cedi will significantly reduce the cost of imports—thereby exerting downward pressure on inflation.
While the BoG raised its policy rate to 28.00% in March 2025 to combat stubborn inflation, Fitch now forecasts a reversal in that stance. It projects a 200 basis-point cut in the second half of 2025, bringing the policy rate down to 26.00% by year-end.
Headline inflation is already showing signs of retreat, dropping from 23.5% in January to 21.5% in April. Fitch expects inflation to average 18.0% for the year, ending at 13.1%—nudging closer to the pre-COVID average of 12.4% seen between 2015 and 2019.
This disinflationary trend, combined with cedi strength and expected interest rate cuts, is forecast to boost household incomes and stimulate consumer demand heading into late 2025.
Meanwhile, Bank of Ghana Governor Dr. Johnson Asiama has dismissed speculation that the central bank is targeting specific exchange rate levels. Speaking at a post-MPC press briefing, Dr. Asiama emphasized that the BoG’s strategy remains focused on curbing volatility—not managing to fixed thresholds.
“We don’t have such a plan on the table that says when the cedi reaches a certain point, we must move to ease the appreciation,” he said, reiterating the Bank’s commitment to market-driven interventions guided by broader economic indicators.
The combination of currency stability, easing inflation, and potential rate cuts suggests a cautiously optimistic outlook for Ghana’s economy in the second half of the year.
