The Bank of Ghana (BoG) has set up a task force to boost regulatory compliance by monitoring all the foreign exchange bureaus in a bid to contain the depreciation of the Cedi.
The bank said it was fully aware of the operations of illegal operators in the foreign exchange market and was working with the financial intelligence centre to sanitise the market.
Dr Ernest Addison, the Governor of the Bank of Ghana, said at a press briefing on Monday, May 27, that the Bank remained fully committed to provide stability in the exchange rate for the Cedi.
On a year-to-date basis, the Cedi has depreciated by 14.6 per cent against the US dollar as of May 22, 2024, compared to 21.8 per cent depreciation for the first five months of 2023.
The Governor has since ordered all foreign exchange bureaus advertising rates outside their premises and on social media platforms to immediately desist from such practice.
He stated that Central Bank had taken measures to improve market conduct and instil sanity in the market for foreign exchange.
“To this end, the bank has worked with the Ghana Association of Banks to streamline documentation requirements for foreign payments to minimise the incentives to resort to the informal markets,” he said.
He said the Bank had adequate reserves to manage shocks to the foreign exchange market, having added over US$600 million to the reserve levels over the first five months of the year (January to May, 2024).
“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 programme,” he said.
On the demand side, Dr Addison said the bank had taken steps in the past few weeks to directly absorb foreign exchange needs of some corporate institutions, leading to a reduced pipeline demand for forex from the commercial banks.
Noting that the foreign exchange market is also affected by sentiments and pronouncements made in this election year, the Governor urged everyone to manage pronouncements which would weaken confidence in the local economy.
GNA
CA/
May 27, 2024
