The Bank of Ghana (BoG) has maintained that the 41% appreciation of the cedi in 2025 reflects mean reversion rather than overvaluation.

According to the central bank, the sharp appreciation was a legitimate correction, not a deviation from underlying fundamentals.

Head of the Financial Markets Department at the Bank of Ghana, Gershon Kudjo Agbledzorwu speaking on Accra-based TV3 on May 2, 2026 explained, “The appreciation of about 41% in 2025 was a correction, not overvaluation. The cedi lost about 77% between 2022 and 2024; the correction was needed.”

Cedi appreciation, forex bureau spread account for 83% of DGPP costs - BoG

He added that international institutions, including the IMF, have affirmed that the cedi’s appreciation in 2025 is consistent with mean reversion dynamics.

Between 2022 and 2024, the Ghana cedi depreciated cumulatively by approximately 77% against the US dollar. This sharp decline underpinned Ghana’s sovereign debt default, the loss of access to Eurobond markets, and the country’s entry into an IMF-supported programme.

Against this backdrop of sustained currency weakness, the cedi’s recovery in 2025, though significant in percentage terms, represents an unwinding of prior overshooting rather than a departure from fundamentals.

Mean reversion refers to the tendency of an asset price that has deviated significantly from its long-run equilibrium to return toward that equilibrium over time. This is a well-established concept in exchange rate economics.

For the Domestic Gold Purchase Programme (DGPP), the cedi’s appreciation presents a double-edged effect.

On one hand, a stronger cedi reduces the local currency cost of purchasing gold from domestic miners. On the other hand, it widens the spread between the forex bureau rate and the official Bank of Ghana rate, contributing to higher reported programme costs in 2025.

The Bank maintains that these accounting effects are temporary and should not distort assessments of the programme’s long-term strategic value.