The Bank of Ghana has initiated and introduced a gold coin for the purpose of championing domestic savings and managing the flow of money in the economy.
The newly launched coins will be made available this October and the pricing will be solely based on the London Bullion Market Association auction price.
Notwithstanding these efforts and attempts, the Ghanaian cedi has continued to lose against the US dollar.
A Rundown of the Purpose of the Gold Coin
The coin launch is an attempt by the Ghanaian government to increase the domestic savings and the management of market liquidity, it comes in different weights which are one, half, and quarter ounces. The gold feature of the coin also comes refined to 99.99% purity.
Following Bloomberg’s report, residents who’d like to buy the coin can do with their Ghanaian cedi. The Governor of the Bank of Ghana highlighted the pricing system of the coin would be coming from the London Bullion Market Association (LBMA) auction price.
“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. It gives those resident in Ghana an additional avenue to invest and reap the benefits of the Bank of Ghana’s domestic gold purchase program,” Addison said.
An advisor of the Bank of Ghana also made comments. He expressed that persons with an interest in investing in the coins should have a minimum of 10,000 Ghana cedis.
In his words, “ So initially, obviously if you want to buy the quarter-ounce coin, you must have savings of GHç10,000 minimum; you must have that. So if you don’t have that, then you would not be able to do that (invest).”
Read Also: Central Bank of Ghana Cuts Interest Rate by 200 Base Points
The Drop of Ghanaian Cedi against Dollar
As mentioned previously, introducing the gold coin is the most recent attempt by the Ghanaian government to increase demand for the cedi. In previous years there have been other efforts which include Ghana’s launching of the ‘gold for oil scheme’, necessitating large gold producers to sell the gold to them at a 20% discount.
This approach demanded the procurement of 65.4 tons of gold valued at $5B.
However, irrespective of these measures, the Ghanaian cedi still didn’t rise against the US dollar.
Report even shows that in June 2024, the cedi hit its lowest value against the U.S. dollar, partly due to a significant drop in cocoa production. As of September 30, 2024, the cedi was trading at 15.77 to the U.S. dollar, a new low for the currency.
Final Thoughts
The government of Ghana has engaged in different mechanisms to see the rise of the Ghanaian cedi against the dollar but it has been futile. With this new development, the introduction of the gold coin, we can only watch and hope this becomes the miracle they’ve been waiting for.
Discover more from DiutoCoinNews
Subscribe to get the latest posts sent to your email.
