Fitch predicts Cedi will end 2025 at ¢15.50 to the dollar despite recent rise

By: Ernest Afram

Despite recent strong gains by the Ghana cedi, global research firm Fitch Solutions has projected that the local currency will end the year 2025 at GH¢15.50 to the US dollar. The firm also forecasts an average exchange rate of GH¢15.30 to the dollar for the year.

This outlook was contained in Fitch’s latest report titled “High Gold Prices Will Shield Ghanaian Economy From Tariff Fallout,” in which it assessed the performance of the cedi and broader macroeconomic indicators influencing Ghana’s external position. The projection is notably higher than the GH¢14.00 end-of-year forecast by Absa Bank.

Fitch acknowledged the cedi’s impressive performance so far this year but noted that underlying pressures and global market dynamics may limit the central bank’s ability to sustain the current momentum through to the end of the year.

The cedi started the year at GH¢15.83 to the dollar. However, it has seen a remarkable appreciation in recent months. As of Monday, May 19, 2025, the currency was trading at GH¢13.50 on the retail market, representing a 17.17% gain since January and making it the world’s best-performing currency so far this year.

Fitch attributed part of this performance to elevated gold prices, which have strengthened Ghana’s external position. It forecasts that gold will average a record US$3,100 per ounce in 2025, an increase of nearly 30 percent from the previous year. This surge is expected to improve the country’s trade balance and enhance foreign currency inflows.

The report further noted that declining global oil prices would reduce Ghana’s energy import bill, contributing to a significant improvement in the current account. Fitch projects that the country’s current account surplus will reach an all-time high of 6.9% of Gross Domestic Product (GDP) in 2025.

Additionally, Ghana’s gross international reserves are expected to rise sharply from US$6.4 billion to US$11.5 billion. Fitch says this improvement will give the Bank of Ghana more room to intervene in the foreign exchange market to cushion the cedi from volatility arising from global risk sentiment, monetary policy shifts in advanced economies, and geopolitical tensions.

“While recent gains are impressive and demonstrate improved market confidence, we still expect pressure on the cedi in the latter part of the year as global factors weigh in,” the report stated. The recent appreciation of the cedi has brought some relief to importers and businesses dependent on foreign exchange, reducing the cost of goods and services and easing inflationary pressures. However, analysts caution that maintaining long-term currency stability will require sustained structural reforms, increased export competitiveness, and prudent fiscal management.