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BoG ends GoldBod prefinancing arrangement

 GoldBod, BoG

The Bank of Ghana (BoG) has announced the cessation of its prefinancing arrangement for the Ghana Gold Board's (GoldBod) gold purchases, a move expected to significantly alter domestic liquidity conditions and influence the country's monetary policy framework.

The Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, disclosed this during his opening remarks at the 131st Monetary Policy Committee (MPC) meeting in Accra.

According to him, the decision took effect on July 1, 2026, ending the central bank's role in providing advance financing for GoldBod's purchases through its auction arrangements.

With effect from 1 July 2026, the Bank ceased prefinancing the Ghana Gold Board's gold purchases through its auction arrangements. This represents an important change in the sources of domestic liquidity and will form part of our assessment this week," Dr. Asiama stated.

The Governor explained that the Monetary Policy Committee will assess how the move has affected liquidity conditions, monetary policy transmission and broader macroeconomic outcomes as it deliberates on the appropriate policy stance.

The decision comes at a time when the Bank of Ghana is also reviewing the effectiveness of recent monetary policy measures, including the introduction of a uniform 20 percent Cash Reserve Ratio for banks.

Dr. Asiama noted that the changing composition of domestic liquidity will be one of the key issues guiding discussions at the MPC meeting, particularly as private sector credit continues to expand rapidly.

He revealed that real private sector credit growth has surged to 34.1 percent, compared to a contraction of 4.5% during the same period last year, reflecting improving domestic credit conditions.

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 added.

The Governor's remarks suggest that the central bank is seeking to strengthen its liquidity management framework while maintaining macroeconomic stability amid rising global uncertainties, including renewed volatility in international oil markets.

The MPC's deliberations over the coming days are expected to provide further insight into how the Bank intends to manage liquidity in the absence of the GoldBod prefinancing arrangement and its implications for inflation, credit growth and exchange rate stability.

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