Dr. Ernest Addison, the Governor of the Bank of Ghana (BoG), has announced the continuation of the domestic Gold for Reserves program, citing its success in surpassing the central bank’s reserve target by almost $1 billion in 2023.
During an interview at the ECCB 40th-anniversary and Central Banking Autumn meetings in Saint Kitts and Nevis in November 2023, Governor Addison expressed the BoG’s intention to sustain the program to further enhance reserves throughout 2024.
“In 2023 alone, we exceeded our reserve target by almost $1 billion. Therefore, we plan to persist with the domestic gold for reserves program, which should contribute to reserve-building efforts in 2024,” stated Governor Addison.
He highlighted the positive impact of the domestic gold purchasing initiative on stabilizing the currency, particularly in 2023, emphasizing its significance in the post-COVID period.
“The gold reserves program has raised over $1 billion compared to the IMF’s $600 million disbursement since the start of 2023—with another $600 million due. It is a substantial amount,” he noted.
The Bank, during its November MPC press briefing, underscored the notable increase in Gross International Reserves, excluding pledged assets and petroleum funds. The reserves, aligned with the IMF-supported program, reached $2.5 billion (equivalent to 1.1 months of import cover) by the end of October 2023—a significant rise from the December 2022 position of $1.5 billion (0.6 months of import cover). This increase was primarily attributed to the success of the gold for reserves program.
Reflecting on the economic challenges in mid-2022, Governor Addison recalled the severe impact on the currency due to portfolio outflows and heightened speculation about an IMF program. He emphasized that the government’s decision to approach the IMF became apparent as the foreign exchange market became disorderly and the cedi depreciated sharply.
“The only way out of the crisis was to approach the IMF,” concluded Governor Addison.
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