BoG governor defends gold-to-forex conversion as strategic reserve diversification

The Governor of the Bank of Ghana (BoG), Dr. Johnson Pandit Asiama, has defended the central bank’s decision to convert part of Ghana’s gold reserves into foreign exchange assets, describing the move as a strategic step to diversify the country’s international reserve portfolio and strengthen its resilience.

Addressing the Parliamentary Committee on Economy and Development in Accra on Monday, March 9, 2026, Dr. Asiama explained that the decision formed part of prudent reserve management practices aimed at maintaining a balanced mix of assets capable of supporting the economy during periods of volatility.

He clarified that the measure did not represent a depletion or loss of national assets but rather a rebalancing of the composition of Ghana’s reserves.

“Let me begin by making one point very clear: Ghana’s gold reserves remain part of our national reserves; what changed as part of this measure was the composition of those reserves,” Dr. Asiama told the committee.

According to him, the Bank of Ghana had significantly increased the share of gold in the country’s international reserves in recent years through the Domestic Gold Purchase Programme introduced in 2021.

Prior to the programme, the central bank held approximately 8.7 tonnes of gold, but sustained purchases under the initiative increased gold holdings to more than 40 tonnes by October 2025.

Dr. Asiama explained that developments in the global gold market also played a role in changing the structure of Ghana’s reserves. Between January and October 2025, global gold prices rose by about 62 percent, significantly boosting the value of the Bank’s gold portfolio.

As a result of the increased accumulation and rising prices, gold accounted for about 42 percent of Ghana’s gross international reserves by October 2025, a level he said posed potential concentration risks.

While acknowledging that gold remains an important reserve asset, the Governor said international reserve management principles emphasise diversification to ensure a balance between liquidity, safety and returns.

He noted that according to international reserve management practices and data published by the World Gold Council, countries at Ghana’s level of development typically maintain around one-fifth of their reserves in gold as part of a diversified portfolio.

“In light of these considerations, the Bank undertook a measured portfolio rebalancing, converting a portion of its gold holdings into foreign exchange assets to restore a more balanced reserve composition,” he explained.

Dr. Asiama stressed that central banks do not manage reserves with the objective of speculating on short-term movements in asset prices but rather focus on maintaining stability and ensuring that reserves remain readily usable when needed.

He further indicated that the foreign exchange obtained from the conversion remains fully part of Ghana’s international reserves and continues to be invested within the Bank’s reserve portfolio to generate returns.

The Governor also noted that portfolio rebalancing is a standard practice among central banks and is carried out periodically to maintain appropriate levels of diversification, liquidity and risk management.

“This was a strategic diversification measure designed to strengthen the resilience and usability of Ghana’s international reserves, not a depletion of national assets,” he emphasised.

Dr. Asiama added that maintaining diversified and liquid reserves is particularly important for Ghana, as the country relies on its reserves to stabilise the foreign exchange market, finance critical imports and respond to external economic shocks.

He disclosed that Ghana’s gross international reserves increased to US$13.8 billion by the end of 2025, providing about 5.7 months of import cover, reflecting improved external buffers.

The Governor noted that the Bank of Ghana would continue to manage the country’s reserves prudently to ensure they remain strong enough to support macroeconomic stability and economic recovery.