Bank of Ghana (BoG) Governor Dr Johnson Asiama says the decision to build up Ghana’s international reserves last year has proved crucial in cushioning the economy against recent external shocks.

Dr Asiama said the country has come under significant pressure from global developments, particularly tensions in the Middle East, resulting in a US$1.2 billion decline in international reserves in recent months.

“The past three to four months have been quite challenging for us when it comes to the country’s International reserves.”

“I am therefore not surprised that we lost 1.2 billion reserves,” he added.

According to the Bank of Ghana’s July Economic and Financial Data, Ghana’s international reserves fell from US$14.1 billion to US$12.9 billion.

Speaking during Part Two of Time with the Governor, an engagement with Economics students from the University of Ghana and the University of Ghana Business School (UGBS), Dr Asiama said the recent decline demonstrated the importance of having a strong reserve buffer.

The students participated in the 131st Monetary Policy Committee meetings as part of the MPC Educational Observership Programme.

“This is why we can say that one of the good things we did last year was to build some high reserves for interesting times like this,” he said.

Dr Asiama said the reserve build-up had provided the central bank with room to respond to global economic pressures and support critical sectors of the economy.

He described managing the impact of external shocks as involving difficult choices, stressing the need for Ghana to continue strengthening its foreign exchange earnings.

The Governor identified cocoa and non-traditional exports as key areas for rebuilding the reserves.

He said non-traditional exports currently account for about 10% of Ghana’s total exports and should be increased to 15%.

Dr Asiama also pointed to remittances as another potential source of support for Ghana’s reserves and economic growth.

He said more of the over US$8 billion received annually through remittances should be channelled into productive investments rather than consumption.