BoG warns of pressure on reserves as GoldBod pauses exports

The Bank of Ghana has cautioned that Ghana's gold shipments slowdown, combined with a pause in exports by the Ghana Gold Board, is putting strain on the nation's external position. At the opening of the Monetary Policy Committee's 132nd meeting, Governor Dr Johnson Asiama revealed that these developments are occurring at a time when the country's external finances are already under pressure.

Dr Asiama highlighted that the weaker current account, shrinking reserves, and GoldBod's export suspension necessitate a close examination of the country's buffers before the typical surge in foreign exchange demand in the fourth quarter. He pointed out that Ghana's gross international reserves currently cover imports for roughly 4.2 months, while the current account is expected to post a deficit in the third quarter due to reduced gold shipments and rising service payments.

The Governor emphasized that strengthening Ghana's reserves will be a top priority for the Bank of Ghana in the upcoming months. This comes as the Monetary Policy Committee evaluates the economic risks, including the consequences of the weakened external position for monetary policy decisions. The Committee is also deliberating whether the existing policy rate of 14% remains suitable amid rising inflation and shifting global economic circumstances.