Dr Abdul-Nashiru Issahaku, Governor, Bank of Ghana
The Bank of Ghana (BOG) has come out with new regulations to govern the conduct of competitive multiple-price foreign exchange (FX) auction to allocate foreign exchange against the Ghana Cedi.
The new regulation, according to the bank, will ensure a well-functioning foreign exchange market and further develop the foreign exchange market within the financial system of Ghana.
In a statement, the Central Bank said the multiple-price auctions would support market development, price formation and also provide a transparent mechanism to intermediate FX proceeds from Cocoa Syndicated Loans to the market.
The new regulations include publication of foreign exchange auction calendar, eligibility, eligible currency and quotation convention, auction schedule and frequency, and bidding process.
The rest are allocation methodology, auction committee, communication of auction results to the market and confirmation and settlement of trade.
The foreign exchange regulations will also apply to foreign exchange funds acquired or sold at the auction.
“The banks are reminded to comply strictly with the regulations in respect of foreign exchange exposure limits as prescribed by the BoG. All authorized foreign exchange dealer banks shall also comply with the provisions of the Code of Conduct for the Interbank Foreign Exchange market in Ghana,” the statement said.
The Central Bank said the regulations shall be reviewed as and when the BoG deems it necessary, adding that the bank reserves the right to amend these rules from time to time based on experience and prevailing circumstances.
By Cephas Larbi
cephrok@yahoo.com