By Amoako Kwame
Bank of Ghana (BoG) Governor, Dr Johnson Asiama, says escalating tensions in the Middle East have placed significant pressure on Ghana’s international reserves in recent months.
According to the Governor, global developments have created a challenging external environment, requiring the central bank to provide support to critical sectors of the economy.
“The past three to four months have been quite challenging for us when it comes to the country’s international reserves,” Dr Asiama said.
He added: “I am therefore not surprised that we lost US$1.2 billion in reserves.”
The BoG’s July economic and financial data show that Ghana’s international reserves declined from US$14.1 billion to US$12.9 billion.
Dr Asiama disclosed this during the second edition of Time with the Governor, an engagement with students from the Department of Economics at the University of Ghana and the University of Ghana Business School (UGBS).
The engagement formed part of the 131st Monetary Policy Committee (MPC) Educational Observership Programme, which gave students the opportunity to participate in MPC meetings and gain insights into the central bank’s decision-making process.
BoG focused on rebuilding reserves
Dr Asiama stressed the importance of maintaining strong international reserves to cushion the economy against external shocks and periods of heightened global uncertainty.
He said Ghana’s decision to build up its reserves in the previous year had provided an important buffer during the current period of global volatility.
“This is why we can say that one of the good things we did last year was to build some high reserves for interesting times like this,” he said.
The Governor acknowledged that managing the impact of external shocks often requires difficult policy choices, particularly when countries face sudden pressure on their foreign exchange reserves.
On efforts to rebuild Ghana’s reserves, Dr Asiama pointed to the need to increase foreign exchange earnings from cocoa and non-traditional exports.
He noted that non-traditional exports currently account for about 10% of Ghana’s total exports, arguing that the figure should be increased to at least 15% to strengthen the country’s external position.
The Governor also identified remittances as another important source of foreign exchange that could help bolster Ghana’s reserves and support economic development.
He said Ghana receives more than US$8 billion in remittances, but stressed the need to channel a greater proportion of these funds into productive investments rather than consumption.
