The Governor of the Bank of Ghana, Dr Johnson Asiama, says rising geopolitical tensions in the Middle East could provide some support to Ghana’s economy through higher global gold prices, but policymakers must remain cautious.

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.”

According to him, gold often becomes more attractive to investors during periods of global uncertainty, pushing prices higher on international markets.

For Ghana, which is a major gold exporter, rising gold prices could translate into stronger export earnings and increased foreign exchange inflows.

However, Dr Asiama cautioned that policymakers must carefully assess the broader implications of the geopolitical tensions on the economy.

He noted that although higher gold prices could support Ghana’s trade balance, the overall impact of the conflict—particularly rising oil prices and disruptions to global shipping routes—could still pose risks to the country’s inflation outlook.

As a result, he said the Monetary Policy Committee will carefully weigh both the potential benefits and risks as it deliberates on the appropriate monetary policy stance.

The committee is expected to take these developments into account when it announces its decision on the policy rate later this week.