The International Monetary Fund (IMF) has said Ghana’s sharp fall in inflation in 2025 is mainly because of the strong and stable performance of the cedi. The Fund explained that this stability followed a difficult year of heavy depreciation that had increased prices and weakened confidence in 2024.
The Ghana cedi has performed very well this year. It has gained about 37 percent against the US dollar as of October 17, 2025.
The IMF stated that the cedi’s rise in value has been a major factor in helping Ghana control inflation. The strong currency has helped inflation drop from 24 percent in 2024 to 9.4 percent in September 2025.
This new rate of 9.4 percent is the lowest level of inflation Ghana has recorded in the past four years. The Fund noted that this progress shows how much exchange rate management can affect price levels in the economy.
The IMF said there is a clear difference between what happened in 2024 and what is happening in 2025. Last year, the cedi lost value quickly, but this year it is appreciating and helping to stabilize prices.
Dr. Adrian Alter, the IMF Resident Representative to Ghana, made these remarks in an interview on Channel One TV’s Point of View program. He explained to host Bernard Avle that exchange rate movements strongly influence inflation across African countries, including Ghana.
“In general, in Africa, we have seen that the exchange rate plays an important role in determining inflation,” Dr. Alter said. He noted that when a country’s currency depreciates sharply, it often leads to higher prices for goods, especially imported ones.
Dr. Alter explained that in 2022, many African currencies lost between 50 to 100 percent of their value. He said that a 100 percent depreciation can lead to about 20 percent inflation from imported products alone.
He added that Ghana’s experience in 2024 was a good example of this relationship. The cedi lost a lot of value, and together with food shortages caused by drought, this pushed prices up sharply.
“The other component was the exchange rate,” Dr. Alter emphasized. “Exchange rate was depreciating last year while this year it is appreciating.”
The IMF said the situation has now improved significantly. The appreciation of the cedi in 2025 has created stability in the economy and restored public confidence.
The World Bank also praised Ghana’s economic progress in 2025. It ranked the cedi as the best-performing currency in Sub-Saharan Africa during the first eight months of the year.
The IMF attributed this success to better fiscal discipline and stronger foreign exchange reforms. These measures have helped reduce pressure on the currency and made the local market more stable.
Dr. Alter said the currency’s current strength has been supported by responsible financial management by the government. He also credited the Bank of Ghana’s tight monetary policy, which helped to control inflation expectations.
According to him, these steps have boosted confidence among businesses and investors. They have also created favorable conditions for a stronger and more stable economic recovery in 2025.
The IMF believes that Ghana’s economic recovery can continue if this level of fiscal and monetary discipline is maintained. It said that exchange rate management must remain a key part of Ghana’s economic policy.
The Fund noted that Ghana’s case is an important lesson for other African countries. It shows that when a country protects the value of its currency, it can control inflation and improve living conditions for its citizens.
The IMF praised Ghana for its progress so far. It encouraged the government to continue implementing sound economic policies that can sustain growth and protect the gains made in 2025.
In summary, Ghana’s inflation has fallen sharply because the cedi has become stronger and more stable. The IMF said this success proves that careful exchange rate and fiscal management can lead to lasting economic stability.
Source : Citinewsroom.com
