The Ghanaian Cedi was named the world’s best-performing currency by Bloomberg, appreciating nearly 16% against the US dollar since April 2025. The surge was contributed to Ghana’s lowest inflation rate in eight months, dropping to 21.2% in April from 22.4% in March.

Key Factors Driving the Cedi’s Appreciation:

– Reduced Import Costs: The cedi’s strength has decreased import costs, driving inflation relief.

– Increased Consumer Confidence: The currency’s performance bolstered consumer confidence, easing pressure on imported goods.

Impact on Inflation:

– Food Inflation: Decreased to 25% from 26.5% in March.

– Non-Food Inflation: Dropped to 17.9% from 18.7% in March.

– Monthly Price Increases: Slowed to 0.8%, largely due to falling import costs.

Monetary Policy and Future Outlook:

– Interest Rate Decision: The Bank of Ghana was unlikely to lower interest rates soon, despite the cedi’s performance, due to potential inflation threats from utility price hikes.

– Inflation Forecast: The Monetary Policy Committee predicted inflation would fall to around 16% by the end of 2025 and return to the target range of 6-10% by the second quarter of 2026.