The country’s Gross International Reserves (GIR) as of the end of January 28, 2022 stood at 9.9 billion dollars.
This is equivalent to more than 4.4 months of import cover.
The Bank of Ghana (BoG) disclosed this in a statement it issued in Accra on Monday, after the Monetary Policy Committee (MPC) meeting to announce a new policy rate.
The MPC held its 104th regular meeting last week to deliberate on recent global and domestic development and how they have shaped macroeconomic conditions and assessed risk to inflation and growth outlook, to decide the new policy rate which was maintained at 14.5 per cent.
The policy or prime rate is the rate at which the BoG lends to commercial banks in the country.
The Central Bank said the GIR as of December 2021 stood at $9.7 billion, equivalent to 4.4 months of import cover.
“This compares with a reserve position of $8.6 billion (4.0 months of import cover) at the end of 2020,” the statement said, adding that “The strong reserve position provided some buffers for the local currency in 2021.”
Cumulatively, the Central Bank said while the Cedi depreciated by 4.1 per cent and 3.1 per cent against the US Dollar and Pound Sterling, respectively in 2021, the Ghana Cedi appreciated by 3.5 percent against the Euro.
In the same period of 2020, the Ghana Cedi recorded depreciations of 3.9 per cent, 7.1 per cent, and 12.1 per cent against the US Dollar, the Pound Sterling, and the Euro, respectively.
The BoG said on the external sector front, provisional trade balance for 2021 recorded a surplus of $1.1 billion (1.6 per cent of Gross Domestic Product) compared to a surplus of $2.0 billion (2.8 per cent of GDP) in 2020.
“The decline in the trade surplus was due mainly to increased imports as the economy rebounded. Total exports were estimated at $14.7 billion in 2021, compared with $14.5 billion in 2020. On a year-on-year basis, the lower total export growth of 1.8 per cent was driven by a 25.2 per cent contraction in gold receipts as production volumes declined by over one million fine ounces during the year,” the BoG explained.
However, it said cocoa and crude oil receipts grew by 20.3 percent and 35.6 per cent respectively.
Total imports, on the other hand, increased by 9.7 per cent year-on-year to $13.6 billion compared with $12.4 billion, adding that the growth in imports was attributed to a 43.8 per cent growth in oil and gas imports, indicating that “Of this, refined petroleum products increased by almost $1 billion over the year reflecting the rebounding economy from the pandemic restrictions in 2020.”
The BoG indicated that the lower trade surplus, together with higher investment income outflows stemming from increased interest payments, and higher profits and dividend repatriation, resulted in a current account deficit of US$2.5 billion (3.3 percent of GDP) in 2021, higher than the deficit of US$2.1 billion (3.1 percent of GDP) recorded in 2020.
It said the capital and financial account recorded a surplus of $3.3 billion based on higher inflows from foreign direct investments, portfolio flows, and the International Monetary Fund Special Drawing Right allocation.
“Significant inflows into the financial and capital account in 2021, more than offset the deficit in the current account, resulting in an overall Balance of Payments surplus of $510 million compared with a surplus of $377.5 million recordedin 2020,” the statement said.
BY KINGSLEY ASARE
