The Bank of Ghana (BoG) has pumped more than $2 billion from its reserves into the foreign exchange market to stabilise the Ghana cedi amid global volatility and mounting domestic pressure.
This intervention, revealed during a meeting between the central bank and Parliament’s Economy and Development Committee, is part of a broader strategy to shield the economy from currency shocks and inflationary pressures.
However, Ranking Member on the Committee, Mr Kojo Oppong Nkrumah, has raised strong concerns about other aspects of the BoG’s monetary policy, particularly its decision to sterilise over GH¢60 billion in liquidity since January 2025.
While acknowledging the short-term benefits of curbing inflation, he warned that such measures, if sustained, could undermine economic growth and job creation.
Gold-for-Oil paid for $1.7 billion in fuel imports
During the closed-door session, the BoG reaffirmed the relevance of the controversial Gold-for-Oil initiative, which it said remains a functioning component of the broader “Hold for Oil” scheme.
According to the central bank, approximately $1.7 billion worth of petroleum cargo was financed under this programme in the first half of 2025.
Mr. Oppong Nkrumah dismissed claims that the Gold-for-Oil arrangement had collapsed or was ineffective, urging the public to disregard such “propaganda.”
He emphasised that the data presented by the BoG proves the scheme’s direct role in financing fuel imports and alleviating pressure on the forex market.
Gold and cocoa price boom bolsters forex reserves
In addition to the oil financing framework, the central bank pointed to Ghana’s strong performance in commodity exports as a major support for the cedi.
Between the first half of 2024 and the first half of 2025, gold prices surged by 43 percent, while cocoa recorded a 90 percent increase.
These gains have significantly boosted foreign exchange inflows, allowing the BoG to intervene in the market to reduce volatility and counter speculative attacks on the currency.
To safeguard future earnings and reduce exposure to commodity price shocks, the central bank is now emploring a gold hedging strategy.
Mr Oppong Nkrumah lauded this move, describing the gold purchase programme as “a masterstroke” that has fortified Ghana’s forex buffers and provided a layer of resilience in uncertain times.
Sterilisation strategy sparks push for rethink
Despite these successes, the Economy and Development Committee questioned the central bank’s decision to withdraw more than GH¢60 billion from the financial system through sterilisation.
Mr. Oppong Nkrumah contended that while such actions are aimed at controlling inflation, they may also be depriving the economy of much-needed capital for expansion and employment.
“We believe a better alternative would have been to channel some of that liquidity into productive ventures such as the Venture Capital Trust Fund and the Ghana Stock Exchange.
“That way, the funds would contribute to real sector growth rather than sit idle in monetary sterilisation accounts,” Mr Oppong Nkrumah pointed out.
He called for a review and redirection of liquidity management strategies to foster investment, innovation, and inclusive job creation.
By Kyei Boateng
