BoG purchases 280 kilogrammes of gold to shore up exchange foreign reserves

The Bank of Ghana (BoG) has so far purchased 280 kilogrammes of gold under its Domestic Gold Purchase programme to help shore up the country’s foreign exchange reserves.

The quantity so far purchased represent more than half of the 540 kilogrammes, the BoG projected to buy this year.

The BoG in June this year launched the Domestic Gold Purchase programme to help increase its gold reserves.

In an interview with the Director of Financial Markets Department of the BoG, Steve Opata, on the Domestic Gold Purchase programme, on the sidelines of a media briefing to announce the Policy rate in Accra on Monday, he said, the objective of the programme was to double BoG’s gold reserves in the next five years.

He said BoG envisaged to increase its current gold holdings to 8.7 tonnes   by 2026 in a bid to bring its total gold reserves to 17.4 tonnes.

Mr Opata said the BoG had not been able to meet its target of  purchasing 540 kilogrammes of gold this year  because the gold had to go through a strenuous process of certification.

The Director of the Financial Market Department said BoG would next year purchase 2050 kilogrammes of gold.

“The BoG has received a lot of interest from local gold mining firms to supply gold under the Domestic Gold Purchase programme,” he said.

Mr Opata said the BoG had budgeted GHC200 million this year from its profits towards the programme.

Among others, he said, the objective of the programme was to help the BoG to grow its foreign exchange reserves to foster confidence, enhance currency stability, and create a more attractive environment for foreign direct investments and economic growth.

The Director of the Financial Market Department said the programme would also enable the Bank to leverage its gold holdings to raise cheaper sources of financing to provide short term foreign exchange liquidity.

Mr Opata said the programme would assist the BoG to diversify its revenue base and provide numerous funding opportunities for the bank.

“The Domestic Gold Purchase programme will assist BoG to borrow at a cheaper cost and build a lot of buffers,” he said.

Mr Opata further said the programme would help reduce the BoG’s dependence on others to borrow money since the bank if the need arose could rely on the programme to raise money.

The country’s Gross International Reserves stands at $11.4 billion, equivalent to 5.2 months of import cover at the end of August, 2021.

Source: Ghanaian Times