Ghana's gross reserves to end year at 2.7 months of imports cover

Ghana’s gross international reserves is projected to decline to 2.7 months of imports by end of this year.

This is assuming exceptional financial support of about US$1.3 billion by the International Monetary Fund and other international financial institutions.

The declined in the foreign reserves might pose some pressure on the stability of the cedi.

Ghana’s gross international reserves declined by GH¢168 million in January 2020.

According to the Bank of Ghana, the gross reserves stood at GHS8.249 billion in January 2020 from GHS8.418 billion in December 2019.

The report said the January 2020 cash and other reserve assets held by the central bank was 3.94 months of imports cover.

This meant that in case the country experiences any shock, it could fund imports by only 3.94 months.

The IMF said the coronavirus pandemic posses threat to inflows and commodity prices particularly crud oil.

“A more extensive and prolonged domestic COVID-19 outbreak would have severe human consequences and lead to a steep economic contraction in 2020 and lower recovery in 2021.

“Food insecurity would rise with disrupted trade and markets, and poverty would worsen. Globally, a slower-than-expected recovery could lead to further declines in oil and cocoa prices and a reversal of gold price increases.”, it explained.

In December 2019, Ghana’s gross international reserves was 4.05 months of import cover.