BoG injects $100m into forex market to shore up Cedi

The Bank of Ghana (BoG) has injected $100 million into the forex market to shore up the Cedi.

This is part of moves to boost supply of dollar to the foreign exchange (FX) market and ease the depreciation of the cedi to dollar further.

A statement issued by the BoG in Accra on Wednesday and signed by the Secretary, Sandra Thompson, said the amount allocated to the Foreign Exchange Forward Auction Limited to the 30-day tenor on Wednesday.

In addition to the guidelines for Bulk Oil Distributing Companies (BDCs) FX Auctions, the statement said all authorised Foreign Exchange Dealer Banks shall also comply with the provisions of the Code of Conduct for the Interbank Foreign Exchange market in Ghana.

“The Bank of Ghana also directs banks to ensure that participation in the auction is limited to qualifying BDCs based on conditions such as evidence of a valid licence to operate as issued by the National Petroleum Authority (NPA) as well as they being in good standing with the NPA,” the statement said.

It said the BDCs must also provide evidence of a contract indicating volumes and cost of the products including premiums or discounts applied, as well as payment due date as well as their contracts being valid for the current window between April 1 and April 15, 2022.

The statement further said BDCs must also ensure evidence of sales to Oil Marketing Companies within the last three months.

“BDCs are also expected to deposit all sales proceeds into an escrow account with their bidding banks for the window in which they participate in an auction. This will be closely monitored,” the statement said.

It said banks are also required to pass on FX won by BDCs at the winning bid rates with no spreads, adding that “The Bank of Ghana noted that it reserves the sole right to auction allocation.”  Meanwhile, the statement said authorised dealers, were being invited to submit their bids in the requested format for the auction through the dedicated email bogfowards@bog.gov.gh between 10.30am and 11.30am.

Source:Ghanaian Times