News:
May 2, 2025
Emerging market currencies have made significant gains against the US dollar over the past two months. The dollar index, which measures the dollar’s strength against a basket of currencies, has fallen by 4.7% in April alone. Some notable emerging market currencies that have gained against the dollar include the euro, which has gained by 0.7 percent, the pound sterling, the Australian dollar, the Chinese yuan, and many more currencies.
These gains can be attributed to various factors, including:
•US-China trade tensions: The ongoing trade standoff has led to a decline in investor confidence in the US dollar.
•Federal Reserve monetary policy: The Fed’s interest rate decisions have influenced global capital flows, with a weaker dollar making emerging market assets more attractive.
•Global economic growth: Strong growth in emerging markets has attracted foreign investment, boosting their currencies.
In Ghana, the cedi has appreciated by some margin against the US dollar alone in April. The Ghanaian cedi has gained about 6.82% against the US dollar in April 2025, with the exchange rate decreasing from 15.49510 GHS per USD on April 2 to 14.43811 GHS per USD as of the end of the month.
Factors responsible include:
1. The tariff war, which has weakened the US economy.
2. Fiscal policy, which has remained constrained, with many jobs executed in 2024 still not being paid.
3. The central bank having pumped in about $1 billion from sources including the IMF.
It will be exciting and beneficial to the business community, both local and international, to see the Cedi in good shape for predictability and proper planning. A lot more has to be done in the area of revenue mobilization, and strict enforcement of some policies by the Central Bank.
Ghanamps.com