Absa: Ghana cedi rallied too far

Absa, one of Africa’s leading banks, says the Ghana cedi has “rallied too far.”

In a statement titled Ghana Market Insight and released on May 12, 2025, Absa cites the Bank of Ghana’s decision to inject more hard currency into the internbank market as part of the cedi’s recent strong performance.

But the bank believes the local currency, which has suffered years of consistent depreciation, “has rallied too aggressively” in recent months.

“The surge in gold prices and still-elevated cocoa prices have translated to strong export receipts and supported Ghana’s official gross reserves, which have recovered to a multi-year high. In turn, the Bank of Ghana has been able to supply more hard currency to the interbank market, which has driven the exchange rate sharply lower from 15.50/USD a month ago to 13.05/USD currently. At these levels, however, we believe the cedi has rallied too aggressively,” the statement said.

“We expect a partial reversal in the cedi towards 14.00/USD by the end of the year so that the real effective exchange rate achieves purchasing power parity again, thereby keeping exports competitive and attracting more financial inflows. Overall, we expect the GHS to average 14.16/USD in 2025.”