The cedi is projected to close 2025 around GH? 17.70 with a potential deviation of ± GHp20.

This forecast by Databank Research suggests a relatively stable foreign exchange market this year, supported by key economic and market drivers.

Databank Research in its 2025 Ghana Market Outlook, attributes the cedi’s expected stability to three key factors.

It notes that Ghana’s gold reserves are projected to strengthen after the 2024 elections.

The research firm expects the new government to prioritize domestic mining, boosting gold production to bolster reserves.

Gold reserves, which stood at 37.52 metric tonnes in mid-2024 are anticipated to surpass 2023 levels, providing a buffer against external shocks.

“In the aftermath of the elections, the new government may focus on enhancing domestic mining companies to boost gold production. This comes at a time when gold reserves have been steadily increasing in recent years, currently standing at 37.52 metric tonnes as of the second quarter of 2024, with projections indicating a rise above the levels recorded in 2023. We believe the move will further augment gold reserves and offer a potential cushion for the GHS (Cedi),” part of the 2025 Ghana Market Outlook read.

Additionally, Databank Research says anticipated credit rating upgrades are likely to boost investor confidence.

Following Ghana’s Eurobond debt restructuring in 2024, Moody’s and Fitch upgraded the country’s ratings, with Moody’s moving its issuer rating from “Caa3” to “Caa2” and assigning a positive outlook.

Databank also predicts further upgrades as economic indicators improve, strengthening the cedi.

“Following the successful Eurobond debt rework in 3Q ‘24, global rating agencies Moody’s and Fitch upgraded Ghana’s long-term local and foreign currency issuer ratings. Moody’s upgraded the issuer rating from “Caa3” to “Caa2” and “Ca”, respectively. and assigned a positive outlook.”

“Fitch Solutions followed with the upgrades, assigning a “CCC+” to Ghana’s new USD bonds from the initial “CCC”. We expect a further upgrade as the rating agencies cited that continuous improvement in economic indicators would attract higher upgrades. We expect these developments to improve sentiments around the GHS [Cedi]and allow for its stability,” the research firm stated.

Thirdly it states that political stability after the 2024 elections is expected to attract foreign direct investment (FDI) and portfolio inflows, easing speculative pressures on the currency.

Disciplined fiscal policies are projected to reinforce this recovery.

“We expect a successful 2024 election to bring renewed confidence in the Ghanaian economy which should lead to increased foreign direct investment and portfolio inflows. This development would bolster investment sentiments around the GHS and reduce speculative attacks on the unit,” Databank Research noted.

Despite these prospects, the cedi faced challenges in 2024, depreciating 28% year-on-year by September, compared to 9.78% in 2023.

This was driven by high corporate dollar demand and fewer-than-expected U.S. rate cuts.

Sustained cedi stability in 2025 will depend on sound policies and leveraging gold reserves to drive growth.