The Bank of Ghana (BoG) has unveiled a new methodology for calculating its Foreign Exchange (FX) Market Reference Rate (MRR), aiming to enhance the accuracy of the rate to better reflect actual market conditions.
The revised approach broadens the scope of data used in its computations, ensuring a more comprehensive representation of daily transactions between commercial banks and their clients.
Alignment with international standards
In a statement, the BoG explained that this development is part of a broader strategy to align the MRR calculation with the International Organization of Securities Commissions (IOSCO) Principles of Financial Benchmarks.
The move represents the first step in ensuring that Ghana’s exchange rate benchmarks adhere to international best practices.
Daily data submission from banks
The BoG further clarified that the new methodology involves the collection of transaction data from all banks operating in the country.
Each working day, banks will be required to submit information on all spot transactions between the US dollar and Ghana cedi that are completed before 3:30 PM, provided they involve amounts of at least $10,000.
This data will encompass both interbank transactions and those conducted with clients, providing a more accurate reflection of prevailing market conditions.
Publishing the new weighted median rate
The submitted data will then be used to calculate a weighted median exchange rate, which will be published on the Bank of Ghana’s website as the official closing rate for that day’s transactions.
According to the central bank, this process ensures transparency and aligns Ghana’s foreign exchange market with global standards.
