BoG ends prefinancing of gold purchasing programme from July 1

The Bank of Ghana (BoG) has ended its prefinancing arrangement for the Ghana Gold Board’s (GoldBod) domestic gold purchases, effective July 1.

The move removes a source of domestic liquidity injection and will be considered by the Monetary Policy Committee (MPC) in assessing monetary conditions and the appropriate policy stance.

Dr Johnson Pandit Asiama, Governor of the Bank of Ghana, announced the decision in his opening remarks at the 131st MPC meeting in Accra.

“With effect from 1 July, the Bank ceased prefinancing the Ghana Gold Board's gold purchases through its auction arrangements,” he said.

Dr Asiama said the decision came at a time when private sector credit growth remained strong and inflation, though low, had started to edge up from recent lows.

“The cessation of Bank prefinancing for GoldBod purchases removes one source of liquidity injection at a time when private sector credit is expanding rapidly.

“The Committee must assess what this implies for the calibration of the current stance, and whether the balance of sterilisation and structural measures remains appropriate,” he said.

Dr Asiama said the MPC would evaluate the impact of the policy change on liquidity management as part of its deliberations on whether the current monetary policy stance remained appropriate.

The prefinancing arrangement was introduced under the Bank’s Domestic Gold Purchase Programme, launched in 2021 to support local gold acquisitions and strengthen Ghana’s foreign exchange reserves.

Under the programme, the central bank financed GoldBod’s purchases of gold from licensed small-scale miners and aggregators.

The gold acquired was added to Ghana’s reserve assets as part of efforts to diversify reserves and strengthen resilience against external shocks.

GNA