BoG trims gold bullion holdings to reduce reserve concentration risk

The Bank of Ghana (BoG) has confirmed a deliberate policy decision to reduce the share of gold bullion in its foreign reserve portfolio to mitigate concentration risk.

Appearing on TV3’s The Keypoints programme on Saturday April 2, 2026, Gershon Kudjo Agbledzorwu, Head of the Financial Markets Department, explained that the re-balancing aligns with internationally accepted best practices in reserve management.

“The best practice for bullion composition in reserves is that it should not exceed 20%,” he said.

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Agbledzorwu noted that in the second half of 2025, the Bank’s Board resolved to rebalance the reserve portfolio after the bullion share exceeded the prescribed threshold.

He explained that the decision was informed by the fact that gold continues to be mined domestically, highlighting the need to avoid excessive reliance on a single asset class within the reserve structure.

"In reserve management, concentration risk arises when an outsized portion of assets is allocated to a single class. In this case, physical gold bullion exposed the portfolio to sharp valuation swings driven by commodity price volatility," he clarified.

Agbledzorwu stressed that proceeds from the sale of gold bullion were neither repatriated nor spent, but reinvested into liquid financial assets that remain part of the reserve portfolio.

“Proceeds from the sales were invested in liquid assets, which are still part of the reserves,” he confirmed while addressing concerns that the reduction in bullion holdings amounted to a drawdown of Ghana’s foreign reserves.

Gross international reserves increased from US$9.1 billion (4.1 months of import cover) in 2024 to US$13.8 billion (5.7 months of import cover) in 2025.

This clarification comes amid ongoing public debate about Ghana’s external buffers.

The central bank emphasised that the portfolio shift represents a technical reallocation across asset classes rather than a liquidation of reserves.

The rebalancing reflects a broader global trend among central banks, which are increasingly diversifying reserve portfolios to balance return, liquidity, and risk.