The Bank of Ghana (BoG) has launched a domestic gold purchase programme.
During the launch on Thursday June 17, Governor of the Bank of Ghana, Dr Ernest Addison, said this event is historic as it marks the first time the central bank is embarking on a domestic gold purchasing to augment our foreign reserves with a view to doubling Gold holdings in our foreign exchange reserves portfolio.
“It therefore marks a significant change in the modus operandi of Bank of Ghana’s foreign exchange reserves management operations,” he said.
Dr Addison explained that the statistics show that the pandemic period saw a marginal decline in central banks’ gold demand but, the number of central bank buyers outweighed the number of sellers over the period.
Most of the buyers were from emerging market countries which had lower ratios of goldto-total reserves.
For instance, Turkey was the largest annual gold net purchaser, adding 134.5 tonnes to its official gold reserves in 2020 alone.
Other large net purchasers of gold during the pandemic year were, India, Russia, United Arab Emirate, Qatar, Colombia and Cambodia, among others. Ghana added nothing to its gold reserves over the period.
“The programme we are launching today therefore sets the stage for Ghana to purchase gold as part of efforts to build its reserves.
“This initial step will enable the Bank of Ghana (BoG) buy domestically produced gold from selected gold aggregators and mining firms and pay in the local currency at the prevailing market price.
“Through this programme the BOG expects to double its gold holdings in the next five years.”
Regarding benefits of the Bank of Ghana Gold Acquisition Programme, Dr Addison said other than the diversification benefits of gold for our reserves portfolio, the domestic gold purchase programme will pave the way for BOG to grow its foreign exchange reserves to foster confidence, enhances currency stability, creates a more attractive environment for foreign direct investments and economic growth.
This programme will also enable the Bank leverage its gold holdings to raise cheaper sources of financing to provide short-term foreign exchange liquidity.
By Laud Nartey|3news.com|Ghana