Bank of Ghana Says Lower Gold Prices Reduced Currency TradingEkow Dontoh
Currency trading in Ghana has slowed as foreign-exchange inflows from gold exports declined and the central bank refrained from using reserves to bolster the cedi, First Deputy Governor Millison Narh said.
Prices for the precious metal dropped 20 percent this year, bringing less money into Ghana’s foreign reserves that it sells at sporadic intervals to banks, Narh said in an interview in the capital, Accra, today. The West African nation is the continent’s biggest producer of gold after South Africa.
“We get less foreign currency from exports, especially from gold,” Narh said.“We don’t want to sell everything to the market, investors also look at our reserves.”
The cedi weakened as much as 0.8 percent and traded 0.5 percent lower at 2.200 per dollar by 3:23 p.m. in the capital, Accra, extending its slide this year to 13 percent, the worst on the continent among 24 currencies tracked by Bloomberg. Johannesburg-based AngloGold Ashanti Ltd., Gold Fields Ltd. and Greenwood Village, Colorado-based Newmont Mining Corp. have gold mines in the country.
The comments from Narh suggests “the central bank will have less dollars to support the cedi going forward,” Collins Appiah, head of asset management at NDK Asset Management Ltd. in Accra, said by phone. “I believe importers started rushing to buy and keep the few dollars that are on the market right now.”
Ghana’s reserves rose to $5.8 billion in August from $5 billion at the end of 2012, the Bank of Ghana said on Sept. 18.