The Bank of Ghana (BoG) has established a task force to enhance regulatory compliance by monitoring all foreign exchange bureaus in an effort to curb the depreciation of the Cedi.
The bank stated that it is fully aware of the operations of illegal operators in the foreign exchange market and is collaborating with the financial intelligence center to sanitize the market.
Dr. Ernest Addison, the Governor of the Bank of Ghana, announced at a press briefing on Monday, May 27, that the Bank remains fully committed to providing stability in the exchange rate for the Cedi.
As of May 22, 2024, the Cedi has depreciated by 14.6% against the US dollar on a year-to-date basis, compared to a 21.8 percent depreciation in the first five months of 2023.
The Governor has ordered all foreign exchange bureaus advertising rates outside their premises and on social media platforms to cease such practices immediately.
He stated that the Central Bank has taken measures to improve market conduct and instill order in the foreign exchange market.
“To this end, the bank has worked with the Ghana Association of Banks to streamline documentation requirements for foreign payments to minimize the incentives to resort to informal markets,” he said.
Dr. Addison reported that the Bank has adequate reserves to manage shocks to the foreign exchange market, having added over US$600 million to the reserve levels in the first five months of 2024 (January to May).
“The improved reserves position is also backed by strong liquid monetary holdings of over 26.6 pounds, estimated at 2.1 billion US dollars, as a result of the very successful domestic gold purchase program,” he said.
On the demand side, Dr. Addison mentioned that the Bank has taken steps in the past few weeks to directly absorb the foreign exchange needs of some corporate institutions, leading to a reduced pipeline demand for forex from commercial banks.
He also noted that the foreign exchange market is influenced by sentiments and pronouncements made during this election year, urging everyone to manage statements that could weaken confidence in the local economy.
