Ghana’s gross international reserves improve to $9.9 billion

The country’s Gross International Reserves (RGI) at the end of January 28, 2022 stood at $9.9 billion.

This equates to over 4.4 months of import coverage.

The Bank of Ghana (BoG) disclosed this in a statement it issued Monday in Accra, after the Monetary Policy Committee (MPC) met to announce a new policy rate.

The MPC held its 104^and regular meeting last week to deliberate on recent global and domestic developments and how they have shaped macroeconomic conditions and assessed risks to inflation and the growth outlook, to decide on the new policy rate which has been kept at 14.5%.

The policy rate or prime rate is the rate at which the BoG lends to commercial banks in the country.

The Central Bank said the GIR in December 2021 was $9.7 billion, or 4.4 months of import cover.

“This compares to 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 buffers for the local currency in 2021”.

Cumulatively, the Central Bank said that while the Cedi depreciated by 4.1% and 3.1% against the US dollar and the British pound, respectively in 2021, the Ghana Cedi appreciated by 3.5% against the euro.

During the same period of 2020, the Ghanaian Cedi registered depreciations of 3.9%, 7.1% and 12.1% against the US dollar, the British pound and the euro, respectively.

The BoG said that on the external sector front, the provisional trade balance for 2021 recorded a surplus of $1.1 billion (1.6% of gross domestic product) against a surplus of $2.0 billion ( 2.8% of GDP) in 2020.

“The decline in the trade surplus was mainly due to increased imports as the economy rebounded. Total exports were estimated at $14.7 billion in 2021, compared to $14.5 billion in 2020. On an annual basis, the weaker growth in total exports of 1.8% was driven by a 25.2% contraction in gold revenue as production volumes fell by more than one million. fine ounces over the year,” the BoG explained.

However, he said cocoa and crude oil revenues increased by 20.3% and 35.6% respectively.

Total imports, on the other hand, rose 9.7% year-on-year to $13.6 billion from $12.4 billion, adding that the growth in imports was attributed to a 43.8% growth oil and gas imports, stating that “Of this, refined petroleum products increased by almost $1 billion during the year, reflecting the rebound of the economy from pandemic restrictions in 2020.”

The BoG said that the decline in the trade surplus, together with the increase in investment income outflows resulting from higher interest payments and higher profits and repatriation of dividends, led to a current account deficit of $2.5 billion (3.3% of GDP) in 2021, higher than the deficit of $2.1 billion (3.1% of GDP) recorded in 2020.

He said that the capital and financial account recorded a surplus of $3.3 billion on the basis of the increase in foreign direct investment inflows, portfolio flows and the allocation of special drawing rights from the International Monetary Fund.

“Significant inflows into the financial and capital account in 2021 more than offset the current account deficit, resulting in an overall balance of payments surplus of $510 million compared to a surplus of $377.5 million recorded in 2020. “, reads the press release.