Kwame Nkrumah Memorial Park, Accra, Ghana. Stock image.
Ghana is working on a program to hedge the price of gold exports as it seeks to shield earnings that have bolstered the central bank’s foreign reserves from future volatility, Governor of the Bank of Ghana Johnson Asiama said.
Increased production and higher prices have helped Africa’s top gold miner to boost gross international reserves to $11.1 billion, Asiama said in the capital, Accra on Tuesday. The buffer is enough to cover 4.8 months of imports, he said.
“While beneficial for now, a future correction in prices could quickly narrow our trade surplus,” Asiama said.
Ghana’s gold exports increased by 76% from a year earlier to $5.2 billion in the first four months through April. That’s underpinned a widening in the trade surplus to $4.1 billion from $759 million over this period.
The improvement, alongside government commitment to fiscal consolidation, has spurred a more than 40% rally in the cedi against the dollar this year to make it the second-best performer in the world among currencies tracked by Bloomberg, after the Russian ruble.
Gold rose 0.3% to $3,351 an ounce at 1:33 p.m. in London, pushing its gain this year to 27.7%. The cedi traded unchanged at 10.4 per dollar.
Cryptocurrency oversight
Asiama said the country is finalizing a regulatory framework for cryptocurrency dealings to bring exchanges and other digital asset platforms under formal oversight.
“It is a fact that crypto is a big thing in Ghana,” he said. “We can pretend but reality is that it is impacting.”
Regulation will allow the central bank to bring virtual currencies under the oversight of its anti-money laundering and terrorism finance rules, and ensure that digital innovation supports rather than undermines foreign exchange control and monetary stability, he said.
(By Moses Mozart Dzawu)