Fitch Warns: Falling Gold Prices Could Hit Ghana’s Reserves and Weaken the Cedi
Sharp Dip in Global Gold Market May Trigger Renewed Cedi Depreciation and Prolonged High Interest Rates
Edem Latsu Nukafu eljourno 
Fitch Solutions has cautioned that Ghana’s international reserves could face severe pressure if global gold prices sharply decline due to a return to traditional U.S. trade policies or the resolution of major geopolitical conflicts.
According to the UK-based research firm, such a downturn in gold — Ghana’s top export earner — would significantly weaken the country’s buffer against external shocks. This, in turn, would make it difficult for the Bank of Ghana to sustain the cedi’s current value, potentially triggering another round of currency depreciation.
“This would keep inflation elevated, hurt consumer and investor confidence, and force the central bank to maintain high interest rates for longer,” Fitch warned in its downside risk assessment.
Positive Outlook Hinges on Cedi Gains
On a more optimistic note, the agency noted that a stronger-than-expected cedi performance could help Ghana’s economy rebound faster.
In this scenario, inflation would fall more rapidly, leading the Bank of Ghana to ease monetary policy sooner. This would result in lower lending rates and increased credit uptake, boosting both private sector activity and household spending.
Government and Private Consumption Trends
Fitch also predicted that government consumption will shrink in 2025 as authorities stick to fiscal tightening under the IMF programme.
However, it expects private consumption to grow, supported by a stable exchange rate and elevated gold prices that help ease cost-of-living pressures and improve household purchasing power.
The mixed forecast underscores the delicate balancing act facing Ghana's policymakers as they navigate external vulnerabilities and domestic recovery efforts.
