Tuesday, 28 May

FX market better than 2022 but gov't can bring back Gold4Oil policy if need be - BoG

Oil for Gold

The Bank of Ghana (BoG) has reiterated its backing for the government's Gold4Oil initiative, underscoring its significance for the nation despite its limitations.

During his appearance before the Public Accounts Committee (PAC) on Monday, April 8, 2024, BoG Governor Ernest Addison stressed the pivotal role the policy played amid the economic turmoil.

Dr. Addison outlined the advantages accrued from the Gold4Oil policy since its inception in 2022, noting a reduction in oil prices compared to those in 2022.

He proposed that the government could continue relying on the policy if oil prices surge at the pumps, opposing any potential discontinuation.

“This is an intervention which was very critical in the heat of the crisis. Yes, the foreign exchange market is functioning better than it was in 2022. Oil prices have come down much better than they were in 2022".

"The situation is much better now than it was in 2022 when the Gold4Oil policy was introduced," he acknowledged.

“However, we think that it’s still an important programme for the government to have that option and to be able to empower commercial banks to undertake their activities". 

"Should market sentiments change, which do every day; we don’t know what will happen tomorrow, and we will wake up and if we find ourselves in a situation where the prices are driving the pumps to where they were again, the government has the option to fall on. It’s a very innovative instrument“.

He also projected "a big jump in gold holdings for Ghana".

Source: Classfmonline.com