Economy to benefit from rising gold prices, says central bank Governor

The Governor of the Bank of Ghana, Dr Johnson Asiama, has stated that rising geopolitical tensions in the Middle East could provide some support to Ghana’s economy through higher global gold prices. Speaking at the opening of the 129th Monetary Policy Committee (MPC) meeting, Dr Asiama explained that while the conflict poses risks to the global economy, it could also boost demand for safe-haven assets such as gold.

“Indeed, colleagues, there is a partial offset that geopolitical uncertainty tends to support gold prices. You know the role of gold in our equation. This could benefit our trade balance,” Dr Asiama said. As a major gold exporter, Ghana could see stronger export earnings and increased foreign exchange inflows if gold prices rise ¹.

However, Dr Asiama cautioned that policymakers must carefully assess the broader implications of the geopolitical tensions on the economy, particularly rising oil prices and disruptions to global shipping routes, which could pose risks to Ghana’s inflation outlook.

The Monetary Policy Committee will weigh both the potential benefits and risks as it deliberates on the appropriate monetary policy stance, with a decision on the policy rate expected later this week.