The Bank of Ghana (BoG) says its Domestic Gold for Reserves Programme has been a good buffer to stabilise the Ghana's currency last year and the programme will continue this year.
Dr Ernest Addison, Governor of the BoG, in a data made available to the Ghanaian Times, said the Domestic Gold for Reserves Programme helped the BoG last year to raise $1 billion to shore up the Cedi.
The amount raised through the Domestic Gold for Reserve Programme last year, he said, was more than the $600 million the International Monetary Fund (IMF) disbursed to Ghana last year under the IMF Extended Credit Facility three-year $3-billion deal with Ghana.
"This year alone, we have been ahead of our reserve target by almost $1 billion. So, we plan to continue with the Domestic Gold for Reserves Programme. And that should help in terms of building reserves going into 2024," he said.
Dr Addison said the programme had material impact in helping to stabilise the currency last year.
"The Domestic Gold for Reserve Programme has had material impact in helping to stabilise the currency, especially this year. That is because the Gold for Reserves Programme has raised over $1 billion, compared with the IMF's $600 million disbursement since the start of 2023 - with another $600 million due in November/December. So, it is a significant amount," he stated.
Dr Addison said Ghana's Gross International Reserves (excluding encumbered assets and petroleum funds) at the end of October last year rose to $2.5 billion, equivalent of 1.1 months of import cover better than the $2.1 billion that was recorded in August and equivalent to one month of import cover.
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Asked what the BoG was doing to achieve its three-month threshold of import cover, the Governor said the BoG was working hard to achieve its reserve target in the next three years.
"But the three months' reserve target is again part of the three-year horizon. What I can say is that our Domestic Gold for Reserves Programme has put us in a better situation than before," Dr Addison stated.
Giving a background to the programme, he said the programme started in 2021.
"We had never focused on the gold part of reserves, always holding the same 8.7 tonnes or so for the last 40 to 50 years," Dr Addison said.
"We realised we were producing a lot of gold. There is a lot of activity out there. So, the question then came up as to why not buy more gold to increase our reserves. It was one of those moments when an obvious policy that could have been implemented several years ago appears to
make a lot of sense, especially during the Post-Covid period when we were looking at several ways to manage the crisis," said the Governor.
The BoG has purchased more than 17 kilogrammes of gold to build its reserves since it started the programme in 2021.
