Ghana’s Reserves Drop $1.2bn as Middle East Tensions Pressure Forex Position – BoG

Ghana’s international reserves have declined by $1.2 billion in recent months as heightened tensions in the Middle East and broader global uncertainties put pressure on the country’s external position, Bank of Ghana Governor Dr Johnson Asiama has disclosed.

The Governor said the challenging global environment had increased pressure on Ghana’s foreign exchange position and required the central bank to intervene to support critical areas of the economy.

“The past three to four months have been quite challenging for us when it comes to the country’s international reserves. I am therefore not surprised that we lost 1.2 billion reserves,” Asiama said.

Data from the Bank of Ghana’s July Economic and Financial Data showed that Ghana’s gross international reserves fell from $14.1 billion to $12.9 billion.

Despite the decline, Asiama said the reserves accumulated during the previous year had provided an important buffer against external shocks.

He explained that maintaining a strong reserve position was essential for protecting the economy during periods of heightened global uncertainty and market volatility.

“This is why we can say that one of the good things we did last year was to build some high reserves for interesting times like this,” he said.

Ghana seeks stronger foreign exchange earnings

As Ghana works to rebuild its reserves, the BoG Governor said the country would need to increase its foreign exchange earnings, particularly through exports.

He identified cocoa and non-traditional exports as key areas with potential to strengthen Ghana’s external position.

According to Asiama, non-traditional exports currently account for about 10 per cent of Ghana’s total exports, but the share should be increased to 15 per cent.

Expanding the country’s export base, he said, would reduce dependence on a limited number of foreign exchange sources and provide additional support for reserve accumulation.

Remittances remain key forex source

Asiama also identified remittances as another important source of foreign exchange for Ghana.

He said the country receives more than $8 billion in remittances, creating an opportunity to strengthen the economy if a greater proportion of these inflows can be channelled into productive investment.

The Governor called for measures that would encourage the use of remittance inflows beyond consumption and towards activities capable of generating employment, supporting businesses and expanding productive capacity.

The decline in reserves comes amid broader global economic uncertainties, including tensions in the Middle East that have heightened risks for international markets and commodity prices.

For Ghana, maintaining adequate foreign exchange reserves will remain critical to absorbing external shocks, supporting economic stability and strengthening confidence in the country’s financial system.

The latest development also highlights the importance of diversifying Ghana’s sources of foreign exchange through stronger exports, productive investment and increased inflows from the diaspora.