Ghana’s central bank launches a gold coin to boost domestic savings and manage liquidity as the cedi continues to depreciate against the U.S. dollar.
Bollywoodfever: Ghana’s central bank has introduced a gold coin to encourage domestic savings and better manage liquidity in the country’s financial system. The coins, refined to 99.99% purity, are available in one, half, and quarter-ounce denominations and will be priced based on the London Bullion Market Association (LBMA) auction price. The gold coins will become available in the first two weeks of October and can be purchased using Ghanaian cedi.
The Bank of Ghana (BOG) governor, Ernest Addison, emphasized that the gold coin initiative is part of the central bank’s strategy to manage excess liquidity in the banking sector. He explained that the coins offer an additional investment avenue for Ghanaians while complementing the bank’s liquidity management efforts. “The Ghana gold coin enables the Bank of Ghana to mop up excess liquidity in the banking sector,” Addison said.
Despite the launch of the gold coin, Ghana’s currency, the cedi, continues to weaken against the U.S. dollar. In a bid to support the currency, the BOG had previously implemented the “gold for oil” scheme, requiring large gold producers to sell their gold to the central bank at a 20% discount. Since the scheme’s launch, the BOG has accumulated 65.4 tons of gold, valued at $5 billion. However, these efforts have not prevented the cedi from declining in value.
As of September 30, 2024, the cedi was trading at 15.77 to the U.S. dollar, marking a new low for the currency. The decline comes amid concerns over Ghana’s cocoa production, which missed initial output projections by around half.
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