Ghana cedis decline sharply by 2.4% against the US dollar in January 2025
The Ghana cedi has experienced a significant decline in January 2025, losing 2.4% of its value against the US dollar.
This marks a sharp drop compared to the 1.3% depreciation recorded in the same period last year.
As of now, the cedi is trading at GH¢15.06 to one US dollar on the interbank market.
Its performance against other major currencies has also been concerning. The cedi depreciated by 3.0% against the euro, trading at GH¢15.69 per euro, and lost 0.8% of its value against the British pound, trading at GH¢18.55 per pound.
On the retail market, the cedi's depreciation against the US dollar rose further to 2.94%, bringing its total depreciation since the start of the year to 3.87%.
Due to several factors, there have been worrying trends. High demand for foreign currency, particularly from businesses in the manufacturing and energy sectors, has put immense pressure on the cedi.
Additionally, the Bank of Ghana's decision to auction US$20 million to Bulk Oil Distribution Companies (BDCs) has further strained the local currency.
This is the steepest decline in the cedi’s value since the start of 2025. Earlier in January, the cedi traded at a mid-rate of GH¢16.15 to one US dollar, but it has since weakened significantly.
However, the ongoing depreciation highlights the persistent challenges in stabilizing the local currency. To address this, the Bank of Ghana and other economic stakeholders will need to implement effective measures to curb further losses.
In monitoring foreign currency demand, supporting export-driven industries, and encouraging foreign investments could help ease the pressure on the cedi.
Government and the central bank are expected to prioritize boosting foreign exchange reserves to tame the pressures.
Other measures industry players suggest include export diversification, reduced import reliance, and prudent fiscal policies to stabilize the currency and support Ghana’s economic recovery.
The cedi’s performance will remain one of the critical issue affecting Ghana’s economy throughout 2025.
