The Bank of Ghana has introduced a gold coin to help it manage money-market liquidity while boosting domestic savings.
According to Bank of Ghana Governor, Ernest Addison, the coin, which has been refined to 99.99% purity is issued and guaranteed by the central bank. The coin comes in three sizes of one, half and a quarter ounce coin, he said.
“The Ghana gold coin enables the Bank of Ghana to mop up excess liquidity in the banking sector and will supplement the bank’s bills for liquidity management,” Addison said.
“It gives those resident in Ghana an additional avenue to invest to reap the benefits of the Bank of Ghana’s domestic gold purchase program.”
The introduction of these gold coins is also expected to reduce pressure on the local currency, providing a viable investment option for individuals who typically purchase and hoard foreign currencies like the dollar.
“If you’re not buying dollars, treasury bills, or bonds, we’re giving you the opportunity through the domestic gold purchasing program to buy gold.
This is what we are launching as the Ghana Gold Coin.”
– Governor of the Bank of Ghana
The coins will be available within the next two weeks through commercial banks, purchaseable in Cedis and priced according to the London Bullion Market Association auction price, he said. He also noted that the gold adheres to the central bank’s responsible sourcing guidelines.
Since launching a domestic gold purchase program in June 2021, the central bank has acquired 65.4 tons of gold, valued at approximately $5 billion, to boost foreign reserves and expand its gold holdings. Additionally, the bank has implemented a ‘gold for oil’ program, Addison stated last month.
Ghana, Africa’s largest producer of gold, and the sixth largest in the world will also be looking to follow in the footsteps of Zimbabwe by adopting a new exchange rate regime that ties the value of the Cedi currency to gold, according to Vice President, Mahamudu Bawumia.
POLITICS | POLITICS | Ghana to Anchor The #Cedi to Gold, Proposes Vice President Bawumia
Anchoring a currency to gold means that the value of the currency is directly tied to a specific amount of gold.
This concept is known as the gold standard.https://t.co/zI6wacqIB1… pic.twitter.com/vNnrmmrx45
— BitKE (@BitcoinKE) August 20, 2024
Zimbabwe overhauled its currency regime in April 2024, adopting a gold-backed unit, ZiG, to replace its defunct local dollar. That was after the depreciation of the Zimbabwean dollar to the U.S. currency reached 80% this year [2024], having lost value every single trading day.
INTRODUCING | Zimbabwe Introduces Zim Gold, the New Currency Backed by Gold and Precious Minerals – https://t.co/ncKtxrEzpg
— Jack Straw (@JackStr42679640) April 8, 2024
But the Southern African nation recently devalued its gold-backed currency by 43% following an increase in demand for foreign currency.
INFLATION | Zimbabwe Devalues the ZiG Local Currency in Response to Rising Demand for Dollars
Monthly inflation accelerated to 5.8% in September 2024, up from 1.4% in August 2024.https://t.co/Hy1xbI3iX9 $ZiG #Zimbabwe #Inflation #Africa pic.twitter.com/GYlcZJA8SN
— BitKE (@BitcoinKE) September 30, 2024
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