The Ghana cedi has been ranked as the best-performing currency globally for the month of April 2025, appreciating nearly 16% against the US dollar, according to data from Bloomberg.

This impressive appreciation has played a significant role in easing inflationary pressures in the country, bringing Ghana’s inflation rate to its lowest level in eight months. The cedi is currently trading at GH₵13.4 to the dollar.

This comes after the Ghanaian cedi performed poorly against the US dollar, depreciating significantly and reaching its lowest point of the year at approximately GH₵16.71 per dollar in October 2024.

Government Statistician Alhassan Iddrisu announced on Wednesday that consumer inflation dropped to 21.2% in April, down from 22.4% in March. Monthly inflation also slowed to 0.8%, largely due to reduced import costs made possible by the cedi’s strength.

Food and non-food inflation also saw notable declines. Food inflation fell from 26.5% to 25%, while non-food inflation eased from 18.7% to 17.9%. Iddrisu credited the cedi’s appreciation for the drop, stating that the currency’s surge had helped curb the cost of imported goods.

Bloomberg’s analysis confirmed that since April began, the cedi has outperformed all other global currencies against the dollar, boosting consumer confidence and reducing inflationary pressures tied to import prices.

However, despite the positive outlook, financial analysts believe the Bank of Ghana (BoG) is unlikely to lower interest rates in the immediate term.

Dr. Agyapomaa Gyeke-Dako, an economist at the University of Ghana Business School, explained that the central bank had taken a tightening stance in its last policy move to absorb excess liquidity. As a result, any decision to cut rates will likely depend on continued improvements in inflation, especially in the face of rising utility costs.

In March, the Bank’s Monetary Policy Committee raised the benchmark interest rate by 100 basis points to 28% in a surprise move aimed at curbing inflation. The central bank has since signaled a cautious approach, committing to monitor economic conditions before making further changes to its policy stance.

“It tightened at its last meeting to mop up any excess liquidity,” said Dr. Agyapomaa Gyeke-Dako, an economist and senior lecturer at the University of Ghana Business School. “So now the central bank action going forward may not readily reduce the monetary policy rate yet because there might still be some threats to inflation coming from the hikes in utility prices.”

The Monetary Policy Committee (MPC) had surprised markets in March with a 100 basis-point hike, raising the key rate to 28% as part of efforts to stabilise prices. The central bank has indicated it will continue to assess inflation trends before easing its stance.

“Easier monetary conditions could rekindle inflationary pressures,” warned Mark Bohlund, senior credit analyst at REDD Intelligence, cautioning that the Bank of Ghana may hold off on any near-term rate cuts.

On issues regarding the volatility of the cedi, the BoG Governor Johnson Asiamah has stated that there is cautious optimism for rate relief later in the year if disinflation continues.

“As the monetary authority sees the next readings of inflation and we see declines, the committee will reassess the scope for a gradual easing in the policy stance.”

In the wake of the cedi’s recent surge against the U.S. dollar, some critics have accused the government of propping up the local currency by offloading foreign reserves. However, the Bank of Ghana has strongly denied these claims, insisting that the currency’s gains are not the result of artificial intervention.

According to the central bank, the cedi’s improved performance is largely driven by a steady buildup of foreign reserves, which has been made possible through the implementation of sound economic policies and strategic initiatives aimed at boosting forex inflows. These efforts, officials say, are strengthening the currency on a more sustainable basis.

Despite this progress, inflation in Ghana remains above the Bank of Ghana’s target range of 6 to 10 per cent—a trend that has persisted since September 2021, when a debt crisis triggered a steep cedi depreciation and sharply increased the cost of imports. The Monetary Policy Committee expects inflation to ease to around 16 per cent by the end of 2025 and gradually return to the target band by mid-2026.

The International Monetary Fund (IMF), which is working closely with Ghana under a support programme, also expressed optimism.

“It makes us very confident that inflation is going to go down in the next few months toward the program objectives,” said Stéphane Roudet, IMF Mission Chief to Ghana, during a recent briefing in Washington.