The Bank of Ghana’s September 2025 Monetary Policy Report confirmed that weakness in the US dollar contributed to the Ghana cedi’s stability this year, as the dollar index recorded its steepest decline in over three decades.
The US dollar index fell approximately 11 percent during the first half of 2025, its worst performance since 1991, driven by weakening American labor markets and anticipation of Federal Reserve interest rate cuts, according to the Bank of Ghana (BoG).
The central bank’s September 2025 Monetary Policy Report stated that job creation in the United States slowed sharply, with unemployment rising to 4.3 percent by August. Markets priced in Federal Reserve rate cuts of 25 to 50 basis points in September, with further easing expected into 2026, prompting investors to shift away from dollar denominated assets.
Governor Johnson Asiama told a press conference on September 18 that the cedi appreciated 21 percent against the dollar through September 12, 2025. He said the cedi strengthened based on strong external sector performance and increased reserve accumulation.
The BoG report explained that weakness in the dollar provided some support to currencies in emerging markets and developing economies (EMDEs), including Ghana’s cedi, which had faced severe depreciation pressures in previous years. The report noted that a growing number of countries are settling oil, commodities and trade in currencies other than the US dollar, including the Chinese yuan.
When the US dollar loses value, it eases pressure on smaller currencies because international trade and debts priced in dollars become relatively cheaper. This dynamic, according to the central bank, played a meaningful role in helping the cedi remain relatively firm during parts of 2025.
However, some local commentators have argued that domestic factors such as increased foreign exchange inflows from record high gold prices, tighter monetary policies and improved fiscal management had stronger impacts than global currency movements. Gold prices surged above $4,000 per ounce during 2025, significantly boosting Ghana’s export receipts and foreign reserves.
The Bank of Ghana report acknowledged multiple factors supporting cedi stability, including prudent monetary policy stance, strong liquidity management, appreciation of the cedi itself, fiscal consolidation and improved food supply. The report indicated inflation declined to 11.5 percent in August 2025, the lowest reading in four years.
Multiple international financial institutions including Morgan Stanley, JP Morgan Asset Management and Al Jazeera documented the historic US dollar weakness in 2025, attributing it to tariff policies under the Trump administration, concerns about US fiscal sustainability, Federal Reserve policy uncertainty and labor market softening.
