Consequently, the country’s Gross International Reserves (excluding encumbered assets and petroleum funds) improved to $2.35 billion, equivalent to 1.1 months of import cover, compared with $1.44 billion (0.6 months of import cover) recorded at the end of December 2022.

The Bank’s Domestic Gold Purchase Programme was launched in June 2021, with the key objective of shoring up the bank’s foreign reserves by purchasing domestically produced gold and converting the same into foreign assets (monetary gold).

Since the inception of the programme, a total of 7.73 tons of monetary gold, valued at approximately $480 million, has been added to reserves well ahead of the target of doubling the gold holdings in five years.

This was disclosed by the Governor of the Bank of Ghana, Dr Ernest Addison when he addressed the media at the 113th Monetary Policy Committee press conference.

He said the foreign exchange market had remained relatively stable for the first six months of 2023, supported by positive market sentiments derived from the International Monetary Fund’s disbursement of the Extended Credit Facility's first tranche of $600 million, forex purchases from the mining and oil sectors and weakened demand.

He noted that the Ghana cedi depreciated by 20.6 per cent against the US dollar in January 2023 and has remained generally stable since then, with a cumulative depreciation of 1.8 per cent between February and June 2023.

Trade balance

The Governor pointed out that in the first six months of the year, the country’s trade balance improved significantly to a surplus of $1.8 billion, compared with $1.5 billion a year earlier, mainly on account of a 13.4 per cent decline in imports, which outweighed a 7.9 per cent drop in export earnings.

The decline in total export earnings was due to lower earnings from crude oil. Higher gold and cocoa export earnings moderated the losses.

Crude oil exports dropped by 41.3 per cent to $1.7 billion, driven by lower production volumes from the Jubilee and TEN fields and a decline in world prices.

Gold exports, on the other hand, increased by 14.2 per cent to $3.5 billion.

Dr Addison said the trade surplus, together with lower outflows in the investment income from lower external debt service payments due to the debt standstill, resulted in a current account surplus of $849.2 million, compared with a $1.1 billion deficit recorded a year earlier.

“Similarly, the capital and financial account recorded reduced net outflow of $897.3 million, on the back of lower outflows in the financial accounts,” he stated.

Commodity prices

Prices of Ghana’s major export commodities (cocoa, gold and crude oil) traded mixed on the international market in the first half of the year. 

Cocoa prices surged to record highs last seen over a decade ago, triggered by tight supplies from West Africa, coupled with expectations of a global deficit in the 2022/2023 crop season.

Dr Addison said that on a year-to-date basis, cocoa beans gained 25.5 per cent to settle at $3,185.29 per tonne in June 2023.

He said international benchmark crude oil prices lost 7.8 per cent in the year to close at $74.98 per barrel due to concerns that sluggish global growth could reduce energy demand. 

He, however, noted that decisions by OPEC+ to deepen production cuts moderated the losses somewhat.

The price of gold went up by 8.1 per cent year-to-date to settle at US$1,942.07 per fine ounce, as increased fears over global recession and possible slower interest rate hikes in the United States loom.

The Governor said increased demand for the metal from China also helped push up prices.