A sharp fall in global gold prices, now sitting above a record-high $3,300 per ounce, could rapidly erode Ghana’s international reserves and trigger fresh economic instability, Fitch Solutions warns in a report highlighting global risks with direct implications for the West African nation.

The UK-based research firm says a return to more conventional trade policies in the United States or the resolution of major geopolitical flashpoints could drive gold prices down, leaving gold-dependent economies like Ghana’s vulnerable.

“In this scenario, the central bank would struggle to maintain the cedi at current levels, leading to a renewed sell-off,” Fitch Solutions stated.

The depreciation of the currency, it noted, would fuel inflation, dampen both consumer and investor sentiment, and force the Bank of Ghana to maintain high interest rates for an extended period.

“This would keep inflation elevated, lead to a weakening in consumer and investor sentiment and prompt the central bank to keep interest rates higher for longer,” the report added.

The warning forms part of Fitch Solutions’ downside risk outlook for Ghana, whose economy remains heavily reliant on commodity exports, particularly gold.

Conversely, the firm said there is room for optimism if the cedi continues to strengthen. A stronger local currency would quicken disinflation and enable the central bank to ease monetary policy sooner than anticipated, stimulating lending and private consumption.

Ghana is one of the world’s leading gold producers. Its production could increase by around 6.25% to approximately 5.1mn ounces in 2025, up from last year’s record output of 4.8mn ounces, the Chamber of Mines said in late May.