Part of our gold reserves used to be liquidated into FX property, no longer written down – BoG – Life Pulse Daily
Editor-in-chiefJanuary 30, 20263 Mins read53
Part of Our Gold Reserves Used to Be Liquidated into FX Property, No Longer Written Down – BoG
The Bank of Ghana (BoG) has addressed public concerns regarding the recent liquidation of a portion of the nation’s gold reserves. This strategic decision was made to rebalance the country’s international reserves portfolio, ensuring long-term financial stability and risk management.
Introduction
In a recent statement, the Bank of Ghana clarified that the liquidation of part of its gold reserves was not a loss but a strategic conversion into foreign exchange (FX) assets. This move was part of a broader reserve portfolio diversification strategy aimed at reducing concentration risk and aligning with global best practices.
Key Points
- The Bank of Ghana liquidated a portion of its gold reserves into FX assets, not a drawdown or loss of national reserves.
- The FX remains fully part of Ghana's international reserves and is being actively invested.
- The decision was made to reduce gold's share of Gross International Reserves (GIR) from over 40% to 20%.
- Proceeds were redeployed into high-quality, liquid foreign-exchange assets and fixed-income instruments.
- The move aligns with global central banking practices and aims to safeguard Ghana's external position.
Background
In December 2024, Ghana’s gold reserves stood at 30.53 tonnes. During 2025, the Bank purchased an additional 10.32 tonnes. However, to align with its strategic goal of reducing gold’s share of GIR to 20%, the Bank divested approximately 22.24 tonnes. This action reduced gold holdings from a peak of about 38 tonnes in October 2025 to 18.61 tonnes by the end of the year.
Analysis
The Bank of Ghana’s decision to liquidate part of its gold reserves into FX assets was driven by several factors:
1. **Rising Gold Prices**: Over the past two years, international gold prices have surged, causing gold to account for a significantly higher percentage of global reserve portfolios. In Ghana’s case, gold’s share of GIR rose to over 40% due to sustained accumulation and rising prices.
2. **Concentration Risk**: Many peer central banks typically maintain gold holdings of about 20-25% of total reserves. Ghana’s higher concentration increased exposure to price swings and weakened portfolio balance.
3. **Strategic Rebalancing**: The Bank aimed to reduce concentration risk, enhance liquidity, and align Ghana’s reserve composition more closely with international benchmarks.
4. **Global Best Practices**: The move was in line with best international practices regarding safety, liquidity, and returns. Reserve portfolios are typically diversified across asset classes to avoid excessive concentration, and periodic rebalancing is standard practice among central banks globally.
Practical Advice
For individuals and businesses interested in understanding the implications of this decision:
– **Stay Informed**: Keep track of updates from the Bank of Ghana and other financial institutions regarding reserve management strategies.
– **Diversify Investments**: Consider diversifying your own investment portfolio to manage risk effectively.
– **Consult Financial Advisors**: Seek advice from financial experts to understand how such macroeconomic decisions might impact your financial planning.
FAQ
**Q: Was the liquidation of gold reserves a loss for Ghana?**
A: No, the Bank of Ghana clarified that the gold was liquidated into FX assets, not written down. The FX remains fully part of Ghana’s international reserves and is being actively invested.
**Q: Why did the Bank of Ghana decide to liquidate part of its gold reserves?**
A: The decision was made to reduce gold’s share of Gross International Reserves (GIR) from over 40% to 20%, aligning with global best practices and reducing concentration risk.
**Q: How were the proceeds from the gold liquidation used?**
A: The proceeds were redeployed into high-quality, liquid foreign-exchange assets and fixed-income instruments, managed by external professional fund managers to support returns while maintaining strong risk controls.
**Q: Will there be further adjustments to Ghana’s reserve portfolio?**
A: The Bank of Ghana stated that reserve portfolio adjustments may continue, guided by market conditions, asset price trends, liquidity needs, and overall risk exposure.
Conclusion
The Bank of Ghana’s decision to liquidate part of its gold reserves into FX assets was a strategic move aimed at rebalancing the country’s international reserves portfolio. This action was not a loss but a deliberate step to reduce concentration risk, enhance liquidity, and align with global best practices. By converting gold into FX assets, the Bank ensured that Ghana’s reserves remain intact, invested, and strong, reflecting prudence rather than pressure.
Sources
– Bank of Ghana Official Statement
– JoyBusiness Report
– Multimedia Group Limited Disclaimer
This article is based on information provided by the Bank of Ghana and other reputable sources. The views and opinions expressed herein are those of the author and do not necessarily reflect the official policy or position of any organization.
Leave a comment