Ghana starts local gold purchase to strengthen currency - BoG

Gold Barsa12121 Gold bars [File photo]

Thu, 19 May 2022 Source: www.ghanaweb.com

Inflation hits 23.6%

BoG increases policy rate to 17% at 105th MPC meeting

BoG MPC commences third scheduled meeting of 2022

Governor of the Bank of Ghana, Dr. Ernest Addison has revealed that Ghana is seeking to buy gold from local sources to help raise the gold component of the country’s gold reserves.

According to him, this is to strengthen the Ghana cedi without causing an increase in inflation.

“We have started a bulk purchase program, domestic, where we buy gold locally and try to raise the gold component in our level of reserves. This is where the current focus is.”

Ghana’s inflation has recorded an all-time high of 23.6% in April 2022, the highest since 2004.

The Ghana Cedi also saw increases from the beginning of the year due to the Russia-Ukraine conflict.

Governor of the Bank of Ghana, Dr. Ernest Addison, has noted that the country’s current inflation comes as a surprise to his team as food, transport, and imports have pushed the country’s inflation to 23.6%.

The Governor noted that the monetary policy is in a huge fix even as it begins meeting today, May 18, 2022, to make decisions on the nearly 24% inflation rate as well as the monetary policy rate of 17%.

Speaking to Bloomberg, Dr. Addison noted that even though issues are complicated currently, a major decision will be taken.

“It’s an issue which in a sense is baffling to all of us. A year ago, inflation in Ghana was near single digit, particularly we were at 7.5% and then we find ourselves a year later in high double digits. It’s a very complicated environment, as you yourself are aware we have come out of COVID-19. But Ghana, fortunately, was able to weather the impact of COVD well without recording high-interest rates.”

“And it seems as if the economy has picked up significantly with a positive growth rate of 5.4%. At the Central Bank, we have anticipated this. In November last year, we raised the policy rate by 100 basis points [2.0%], and then we were rather surprised by the inflation rate which came out later on. After that in February [2022] in particular which triggered the 250 basis points [2.5%] adjustment in the policy rate”, he explained.

Source: www.ghanaweb.com
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