International Reserves Crosses $2 Billion Mark

Ghana’s international reserves crossed the $2 billion mark for the first time in the economic history of the country at the end of October 2006.“These reserves are enough to cover 3.5 months of imports of goods and services,” the Governor of the Bank of Ghana (BoG), Dr Paul Acquah, has said.Dr Acquah, who was speaking at a press conference of the Monetary Policy Committee (MPC) of the BoG, said the external payments position was robust, with a reduced current account deficit in 2006 and a further build-up of gross international reserves.He said private inward transfers attributable to non-governmental organisations, embassies, service providers, individuals, among others, and channelled through the banks and finance companies from January to October 2006 amounted to $4.79 billion.He said that represented a 25.9 per cent increase over what was recorded for the corresponding period of 2005. Of the total transfers in the period, $1.22 billion (about 25 per cent) accrued to individuals, compared with 30.6 per cent over the same period in 2005.He said the foreign exchange market also saw an increased volume of activity during the year and reduced volatility in the market.He disclosed that the purchases and sale of foreign exchange by banks and forex bureaux in the 11-month period to November 2006 amounted to $6.01 billion, an increase of 13.9 per cent over the same period in 2005, and stated that the volume of dollar transactions dominated the market, accounting for some 80.4 per cent in the month of November, with the pound sterling at 7.3 per cent and the euro at 12.3 per cent.Measuring the cedi against international currencies, the governor said the cedi remained relatively stable against the US dollar during the year, explaining that cumulatively the cedi depreciated against the dollar by 1.1 per cent.He said the cedi depreciated much more against the euro by 12.2 per cent and the pound sterling by 14.2 per cent for the period January to November 2006.“This compares with a depreciation of 0.6 per cent against the US dollar and an appreciation of 14.3 per cent and 10.5 per cent respectively against the euro and the pound sterling in the same period a year earlier,” he said.He said in trade weighted terms, the cedi appreciated cumulatively by 1.1 per cent for the period January to October 2006 and by 5.2 per cent in foreign exchange weighted terms.On the issue of imports during the period under review, Dr Acquah said strong domestic demand reflected in a strong import growth and that amounted to $5,414.80 million in total imports for the period January to October 2006.That, he explained, represented an increase of 27.2 per cent, compared with a total import bill of $4,255.76 million for the same period in 2005.Non-oil imports amounted to $4,202.86 million, an increase of 23.0 per cent over the $3,416.30 million recorded for the same period in 2005.Consumption goods imported, he said, were estimated at $966.3 million, an increase of 17 per cent over the previous year’s level of $826.1 million.Capital goods imports, on the other hand, amounted to $873.5 million, representing a 22 per cent increase over the amount for the same period in 2005.Intermediate goods imports were estimated to be $3,213.0 million, compared with $2,404.0 million in 2005. Of these amounts, fuel and lubricants accounted for $1,164.47 million and $839.48 in 2006 and 2005 respectively, with the increase reflecting mostly in the rise in oil prices on the international market.These developments, Dr Acquah explained, resulted in a trade deficit of $1,871.56 million for the period up to October 2006 but stated that the current account turned in a reduced deficit of $45.6 million, compared with a deficit of $581.7 million recorded in 2005.He said the overall balance of payments recorded a deficit of $111.04 million, compared with a deficit of $195.29 million recorded for the corresponding period in 2005.He said provisional estimates indicated an overall surplus of $406.73 million for the year, bolstered by the seasonal inflows of cocoa proceeds.
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