Dr. Johnson Pandit Asiama
Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, has stressed that the bank’s decision to convert a portion of its gold holdings into foreign exchange assets did not represent a loss of the country’s national assets but rather helped to restore a more balanced reserve composition.
Appearing before the Parliamentary Committee on Economy and Development yesterday, the Central Bank Governor said, “The gold was converted into foreign exchange assets, which remain fully part of Ghana’s international reserves.”
He also noted that Central banks do not manage reserves with the objective of speculating on short-term price movements. Rather, he said reserve management focuses on maintaining an appropriate balance between liquidity, safety, and diversification so that the country’s reserves remain resilient under changing market conditions.
“Between January and October 2025 alone, global gold prices rose by approximately 62 percent, significantly increasing the value of the Bank’s gold portfolio. As a result of both increased accumulation and rising global prices, gold came to represent about 42 percent of Ghana’s Gross International Reserves by October 2025. While gold remains an important reserve asset, such a high concentration in a single asset class introduces portfolio concentration risk for countries like Ghana,” he said.
Dr. Asiama further stated that international reserve management practices recommend countries at Ghana’s level of development to typically maintain around one-fifth of their reserves in gold as part of a diversified portfolio.
“Unlike advanced economies whose currencies serve as global reserve assets and whose financial markets are deep and highly liquid, Ghana relies more directly on its international reserves to stabilise the foreign exchange market, finance essential imports, and respond to external shocks. For that reason, reserves must not only be valuable, but also liquid, diversified, and readily usable when needed,” he added.
The Central Bank Governor noted that the move is not the first time the Central Bank has rebalanced its gold portfolio as it is a standard practice in its reserve management and is undertaken periodically to maintain diversification, liquidity, and risk control.
“The foreign exchange gained from the transaction continue to be actively invested as part of the Bank’s reserve portfolio, generating returns while preserving Ghana’s external buffers,” he emphasised. “This was a strategic diversification measure designed to strengthen the resilience and usability of Ghana’s international reserves, not a depletion of national assets.”
Macroeconomic Outcomes
Dr. Asiama, addressing the committee, said the policy measures implemented during the stabilisation period are delivering the intended results which are evident in the macroeconomic data.
“External buffers have strengthened considerably. Gross international reserves increased to US$13.8 billion by the end of 2025, providing approximately 5.7 months of import cover. Inflation has declined sharply. Headline inflation fell from 23.8 percent in December 2024 to 5.4 percent by December 2025, and further to 3.3 percent in February 2026, one of the lowest readings recorded in recent history. This decline reflects both sustained monetary tightening and favourable base effects following the earlier inflation surge,” he said.
The BoG Governor also cited the stabilisation of the exchange rate with the Cedi recovering strongly and interest rates declining across the financial system as inflation expectations improved.
“Business and consumer confidence have also improved as macroeconomic stability has been restored. For ordinary Ghanaians, the real measure of success is simple: prices are stabilizing, the cedi is steadier, and the economy is moving back toward normal,” he said.
On the domestic banking sector, Dr. Asiama said through recapitalisation efforts and close supervisory engagement, the banking system has strengthened considerably with capital adequacy improving to 17.5 percent, comfortably above the 13 percent regulatory minimum.
“Asset quality has also improved. The non-performing loan ratio declined from 21.8 percent to 18.9 percent, and banks now have a clear roadmap to reduce NPLs toward 10 percent by end-2026. Nominal private sector credit growth accelerated to over 19 percent, while real credit growth rose to about 13 percent, compared with two percent the previous year.
“Taken together, these indicators show that the banking system today is liquid, solvent, and profitable, and increasingly positioned to support Ghana’s economic recovery. Put simply, a stronger banking system means more credit flowing into the economy, where jobs and growth are created,” he added.
A Daily Guide Report