Ghana’s reserve buffer shrinks to 4.2 months as BoG flags fresh external risks

Ghana’s gross international reserves have fallen to about US$11.1 billion at the end of August 2026, reducing the country’s foreign-exchange buffer to 4.2 months of import cover and prompting the Bank of Ghana to flag renewed risks to the external position.

The latest decline represents a significant reversal from the US$14.16 billion recorded in March. Reserves fell to US$12.94 billion by June and have since declined by a further US$1.87 billion, leaving the country with a considerably smaller cushion to meet external payment obligations and respond to pressure in the foreign-exchange market.

The deterioration has occurred despite strong export performance, particularly from gold. The Bank of Ghana previously reported that Ghana recorded a US$8.8 billion trade surplus in the first half of 2026, supported by strong gold and cocoa export earnings, while the current account surplus reached US$5.1 billion.

Gross international reserves, however, stood at US$12.9 billion at the end of June.

The latest reserve position means Ghana has lost roughly 1.5 months of import cover since the beginning of the year, falling from 5.7 months at the end of 2025 to 4.2 months currently.

The shrinking buffer could become more significant if demand for foreign exchange rises during the traditionally stronger fourth-quarter period.

Bank of Ghana Governor Dr Johnson Asiama identified the declining reserves, a projected current account deficit and a pause in gold exports by the Ghana Gold Board since mid-August as key risks that require close monitoring.

He said the developments would be important considerations for the Monetary Policy Committee as it assesses the balance between inflation, exchange-rate stability and economic activity.

“Rebuilding reserves will be a key priority for the Bank in the coming months,” Dr Asiama said, signalling the importance the central bank attaches to restoring the country’s external buffers.

The pause in GoldBod’s gold exports introduces an additional uncertainty because gold has been a major source of Ghana’s export earnings and foreign-exchange accumulation.

The Bank’s concern comes against a broader effort to strengthen the external position, following the substantial improvement recorded in the first half of the year before the recent drawdown.

The immediate challenge for policymakers is therefore not only to maintain the recent gains in macroeconomic stability but also to rebuild the foreign-exchange reserves needed to provide protection against external shocks.

With the fourth quarter approaching, the trajectory of reserves, gold exports and foreign-exchange demand is likely to remain an important consideration for monetary policy.

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