By Anane Agyei, PhD
Ghana’s economic fortunes have long been tied to the ebb and flow of its currency- the Cedi. Over the past decade, the Real Effective Exchange Rate (REER) has traced a path of relative stability, followed by sudden turbulence—a journey that now demands urgent policy attention.
The Calm Before the Storm
Between 2015 and 2019, Ghana’s REER hovered near equilibrium, supporting export competitiveness and a healthy external balance. This period of stability fostered optimism among policymakers and exporters alike. Yet, as the world reeled from the Covid pandemic, Ghana’s currency began to appreciate moderately, with the equilibrium rate remaining steady.
 
Source of Data: Author’s estimation based on IMF’s Behavioral Equilibrium Exchange Rate (BEER) model. Determinants: GDP growth, interest rate differentials, commodity prices. Estimated equilibrium REER for Ghana tends to hover near 70–75 (2010=100) in recent years, suggesting mild undervaluation in 2024
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