Ghana’s Foreign Reserves Climb to $14.5bn – Dr. Asiama

By Praisebell Rosemond Larbi

Ghana’s external financial buffers have strengthened further, with the country’s gross international reserves rising to about $14.5 billion, according to the Governor of the Bank of Ghana, Johnson Asiama.

Speaking at the opening of the 129th Monetary Policy Committee (MPC) meeting, the Governor said the current reserve position represents a significant improvement since the committee last met.

“External buffers have strengthened further. Gross international reserves now stand at about $14.5 billion, up from the over $13 billion recorded at the last meeting,” he said.

According to Dr. Asiama, the current reserve levels provide stronger protection for the Ghanaian economy against potential global economic shocks.

He explained that the reserves now represent about 5.8 months of import cover, an important benchmark used to assess a country’s ability to finance its import needs and maintain external stability.

Sign of Improving Economic Stability

The Governor noted that the improvement in the country’s reserve position is one of several key indicators suggesting that Ghana’s macroeconomic environment is stabilising.

Dr. Asiama said the strengthening of external buffers, together with improvements in other economic indicators, points to faster-than-expected recovery in the economy.

“Taken together, these indicators point to an economy that is stabilising more quickly than many had expected,” he stated.

Analysts say a stronger reserve position helps maintain investor confidence and provides the central bank with more flexibility in managing exchange rate pressures and external vulnerabilities.

New Reserve Accumulation Programme

Dr. Asiama further revealed that the government has introduced a new initiative aimed at significantly boosting Ghana’s external reserves over the medium term.

The programme, known as the Ghana Accelerated National Reserve Accumulation Programme, seeks to strengthen the country’s foreign exchange buffers in the coming years.

“Since our last meeting, the government has announced the Ghana Accelerated National Reserve Accumulation Programme, an ambitious one,” the Governor said.

According to him, the programme aims to substantially increase Ghana’s reserve levels to provide greater protection for the economy.

“It seeks to raise international reserves to 50 months of import cover by 2028, compared to current levels of around 5.8 months of import cover,” he explained.

Policy Coordination Needed

However, Dr. Asiama cautioned that initiatives aimed at building large reserve buffers require careful coordination between fiscal and monetary authorities.

He said policymakers must consider the potential implications for liquidity conditions within the financial system as well as the impact on the central bank’s balance sheet.

“Strengthening external buffers is an important element of macroeconomic resilience. But initiatives of this scale raise questions regarding liquidity conditions, the impact on the central bank’s balance sheet, and the interaction between reserve accumulation and monetary policy operations,” he noted.

The Monetary Policy Committee is expected to take these developments into account as it deliberates on the appropriate policy direction for the economy in the coming months.

The outcome of the ongoing MPC meeting is anticipated to provide further insights into the central bank’s strategy for sustaining macroeconomic stability while supporting economic recovery.