The Ghana Gold Board has resumed significant gold exports after a period of less regular shipments, providing fresh support for Ghana’s foreign exchange reserve accumulation as the Bank of Ghana prepares to give GoldBod a greater role in the country’s evolving foreign exchange framework.
Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, disclosed at the 132nd Monetary Policy Committee press briefing that GoldBod shipped a significant quantity of gold in the past week, easing concerns about the impact of slower shipments on the country’s reserve build-up.
The Governor explained that gold shipments had become less regular in August compared with the preceding two quarters, raising concerns about the potential effect on Ghana’s foreign exchange position.
But Dr Asiama said the latest information received by the central bank showed that shipments had picked up again.
“The shipments have resumed. In fact, in the last week, Gold Board exported quite a significant amount of gold and this is supporting the reserves build-up,” he said.
The Governor said the latest information became available after the MPC meeting had started, changing the assessment from the data available when deliberations began.
He consequently played down concerns that GoldBod’s ability to export gold currently represents a major threat to reserve accumulation.
Instead, Dr Asiama identified movements in the international price of gold as a more important external risk because global gold prices are outside Ghana’s control.
The resumption comes as GoldBod assumes an increasingly important role in the generation and distribution of foreign exchange.
Under a financing model introduced in August, GoldBod generated US$1.315 billion in foreign exchange during that month, with US$668.21 million sold directly to commercial banks through spot sales and funded forward arrangements. Another US$646.59 million was made available to the Bank of Ghana for reserve accumulation.
The Bank of Ghana is now working on a further transition in its foreign exchange operations framework that could give GoldBod a greater role in FX intermediation.
Dr Asiama explained that the central bank’s FX framework has three main components; reserve accumulation, intervention and intermediation, and said discussions are underway with GoldBod to refine a new arrangement for the intermediation component.
“We are in touch with Gold Board trying to perfect that new framework. And when we are ready, when it is done, we will communicate this to the market,” the Governor said.
The planned shift does not mean the Bank of Ghana is withdrawing from the foreign exchange market. Dr Asiama said the central bank will continue to intervene under its established framework when conditions require it.
He stressed that such interventions are governed by rules rather than the personal discretion of the Governor, with the exchange rate principally expected to respond to market forces.
The Governor said the central bank’s overriding priority remains the accumulation of sufficient foreign exchange reserves to provide Ghana with a stronger buffer against external shocks.
“Our prime objective is to build adequate reserves at all times, because that is what supports our resilience as a country,” Dr Asiama said.
GoldBod’s expanding role represents a significant shift in Ghana’s gold and foreign exchange architecture. The institution is increasingly dealing directly with commercial banks and generating foreign exchange through gold exports, while the Bank of Ghana concentrates on reserve accumulation, monetary policy and rules-based intervention in the foreign exchange market.
