Ghana’s gross international reserves decline by GH¢168 million, according to Bank of Ghana report

The reserves, according to the Bank of Ghana stood at GHS8.249 billion in January 2020 from GH¢8.418 billion as of December 2019.

The central bank’s said this in its January 2020 Statistical Bulletin.

The report said the January 2020 cash and other reserve assets held by the central bank is 3.94 months of imports cover.

This means that in case the country experiences any shock, it can fund imports by only 3.94 months.

In December 2019, the import cover was 4.05 months of import cover.

The Finance Minister, on Monday, March 30, 2020, tabled before Parliament a proposal that if the legislature passes, will allow the government to borrow up to 10% of the previous year’s tax revenue in the event of tight domestic financing market conditions amid the COVID-19 pandemic.

The move would reduce the nation’s foreign exchange reserves and put pressure on the cedi if demand for the currency resurges.

In January this year, the International Monetary Fund (IMF) disclosed that Ghana’s foreign exchange reserve level remained relatively low.

“Gross international reserves stood at 2.7 months of imports in 2018, lower than the three-month rule-of-thumb benchmark and the norm of 3.6 months estimated by the model for resource-rich LICs (Lower-Income Countries) with a flexible exchange rate,” the IMF said in a report.

The Bank of Ghana’s Monetary Policy Report had quoted the country’s Gross International Reserves increased by $1.67 billion to US$8.093 billion in October 2019 from a stock position of $7.02 billion at the end of December 2018. This was also equivalent to 3.9 months of imports cover compared.