Cedi Depreciation Raises Concerns as Early-Year Optimism Fades

Initial optimism among businesses and traders about the cedi’s stability against the US dollar at the start of the year has quickly faded due to its continuous depreciation.

Although the local currency began the year on a relatively steady note, it has seen a sharp decline just six weeks in.

According to data from the Bank of Ghana, the cedi has depreciated from GH₵14.5 per dollar in early January to GH₵15.55 per dollar, with forex bureaus quoting even higher rates. This represents a 6.5% depreciation within the first six weeks of 2025.

Economic analysts warn that if this trend persists, the cedi could lose over 50% of its value against the US dollar by the end of the year. Many have called on the government to intervene promptly to prevent further deterioration.

Meanwhile, despite a 5.65% drop in global crude oil prices, the weakening cedi has contributed to a rise in fuel prices across Ghana.

A report from the Institute for Energy Security (IES) indicates that in the first pricing window of February 2025, fuel prices increased for the third time this year. Gasoil prices rose by GH₵0.45 per litre, while gasoline went up by GH₵0.24 per litre.