Cedi depreciates by 2% against major currencies in early 2025

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The Ghanaian cedi has started 2025 on a challenging note, recording an average depreciation of 2% against major global currencies. This trend highlights ongoing difficulties in stabilizing the local currency.

According to the Bank of Ghana’s latest Summary of Economic and Financial Data, the cedi has declined by 2.4% against the US dollar, 3.0% against the euro, and 0.8% against the British pound as of January 2025. The official exchange rates now stand at GHS 15.06 to the dollar, GHS 15.69 to the euro, and GHS 18.55 to the pound.

However, forex market rates indicate even higher levels, with the dollar trading between GHS 15.90 and GHS 16.20. This disparity has increased the cost of imports and external transactions, further straining businesses and consumers.

Analysts attribute the depreciation to heightened demand for foreign exchange, spurred by import activity and external debt servicing. Other contributing factors include global financial tightening, fiscal imbalances, and high inflation, which continue to exert pressure on the currency.

To address these challenges, the government and the Bank of Ghana are expected to focus on building foreign exchange reserves. Industry experts also suggest measures such as export diversification, reduced reliance on imports, and disciplined fiscal policies to stabilize the cedi and support economic recovery.

The cedi’s performance is anticipated to remain a key indicator of Ghana’s economic progress throughout 2025. As one industry expert noted, “Addressing these currency pressures will be critical in navigating the country’s economic challenges in the year ahead.”

 

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