Ghana’s Cedi Becomes 2025 Strongest Currency, with 50% Rally Powered by Gold, Tight Policy and IMF Reforms

The Ghanaian cedi has emerged as the world’s strongest currency in 2025, surging nearly 50 percent against the US dollar since January and reversing years of market volatility and investor skepticism. The turnaround has stunned analysts and rekindled confidence in an economy that only recently crawled out of its deepest debt crisis in decades.

From trading near 15 Cedis to the dollar at the start of the year, the cedi has steadily climbed, brushing against the symbolic C10/$ resistance level. On Monday, the currency opened at GHC 10.21, posting a 7 percent gain over Friday’s close. Bloomberg data confirms that the cedi now holds the title of best-performing currency globally in 2025.

This sharp appreciation is particularly striking when contrasted with 2022, when the cedi was the worst-performing currency in the world, losing over half its value amid runaway inflation and a sovereign debt default. That chaos forced Ghana into the arms of the International Monetary Fund and triggered a painful economic overhaul. Today, however, the narrative has flipped dramatically, with Ghana now being lauded for what appears to be one of the fastest currency stabilizations in recent history.

Several key forces are behind the Cedi’s meteoric rise.

First, a windfall from surging commodity exports has pumped hard currency into the economy. Ghana’s status as a leading global gold producer — now ranked sixth in the world — has paid off handsomely, especially as gold prices soared from around $2,000 an ounce in 2024 to more than $3,400 in May 2025. That price spike helped lift the country’s gold export earnings from $7.6 billion in 2023 to $11.6 billion the following year. Cocoa and oil exports also contributed to a record trade surplus of $4.3 billion in 2024.

A major shift in policy under the government’s Gold Board initiative further strengthened the local currency. Exporters were mandated to settle gold purchases in Cedis before shipping them abroad. That helped the Bank of Ghana triple its gold reserves from just 9 tons in late 2023 to 31 tons today, easing pressure on the foreign exchange market and boosting confidence in the Cedi’s long-term stability. Ghana’s gross international reserves now stand at $11.4 billion — their highest level in history.

Meanwhile, the Bank of Ghana has taken a decidedly hawkish stance to guard against inflation and defend the currency’s newfound strength. In March 2025, the central bank surprised markets with a 100-basis-point interest rate hike, pushing the benchmark policy rate to 28 percent. Governor Johnson Asiama has insisted that “stability doesn’t mean fixation,” stressing the need for a delicate balance between a strong cedi and the need to maintain export competitiveness.

The central bank has also made structural changes to how the foreign exchange market functions. By replacing speculative limit-order-based controls with spot-market forex auctions, the BoG has improved dollar availability and reduced currency hoarding among businesses. These steps have calmed volatility and added clarity to currency pricing mechanisms.

Lower inflation has helped create further breathing room for monetary authorities. Ghana’s inflation dropped to 21.2 percent in April, easing from a 2023 peak of over 40 percent. But that figure still sits well above the BoG’s official target band of 6 to 10 percent, prompting some economists to warn against premature policy loosening. Rising utility tariffs and residual inflation risks mean the central bank may have to hold its fire on rate cuts for now, despite mounting pressure from parts of the business community.

Backing all of these domestic measures is a lifeline from the International Monetary Fund. The country’s $3 billion bailout deal, part of a broader three-year reform package signed in 2023, has been instrumental in unlocking concessional financing, restoring investor trust, and enforcing fiscal discipline.

Under the program, Ghana took aggressive steps to reduce its debt burden, including suspending 65 billion Cedis in arrears payments and slashing short-term Treasury bill yields from 28 percent to around 15 percent. These austerity measures, though unpopular, helped narrow the deficit and keep financing costs manageable.

Political stability has also underpinned Ghana’s turnaround. President John Mahama’s sweeping economic reforms, many of them adopted under pressure from the IMF, have helped reassure international investors and rating agencies that Ghana’s recovery is on solid footing. The return of foreign capital has, in turn, supported the cedi’s rally.

But the cedi’s strength, while helpful for controlling import-driven inflation, could eventually erode export competitiveness, especially for sectors like agriculture and manufacturing that depend on a cheaper currency. Policymakers are also wary that speculators could take aim if the central bank lets its guard down.

For now, however, the mood has shifted from anxiety to optimism. Investors who once fled Ghana’s bonds are slowly returning, emboldened by the currency’s performance and the broader stabilization story.