Dr Ernest Addison
The Bank of Ghana (BoG) has fined the Barclays Bank Ghana an amount of GH¢4,579,256.36 for making frivolous quotes on Ghana’s Interbank Foreign Exchange Market.
This action, according to a statement issued yesterday by the Central Bank, was in breach of the Ghana Interbank Forex Market Conduct Rules.
It said the Bank of Ghana (BoG) is committed to ensuring sanity, transparency and promoting best practices that would develop and deepen the FX market in Ghana.
“In pursuit of the above goals, the Bank of Ghana will not hesitate to sanction any market participant whose actions contravene Ghana’s Interbank FX Market Conduct Rules,” it added.
Even though the Central Bank did not state categorically which ‘frivolous’ words the Barclays Bank Ghana made, it said that market participants are required to conduct their activities ethically, transparently and professionally to ensure fairness and integrity of the foreign exchange market, among others.
The BoG stressed the need for market participants to have high level of awareness and understanding of market practices.
Also, it asked management of licenced foreign exchange dealers to subject their staff to the highest test of knowledge and continuously provide avenues for knowledge updates.
Furthermore, it said all licenced foreign exchange dealers must show a binding two-way quote for all currencies traded in the interbank market if requested by another licenced foreign exchange dealer.
Also, the directives pointed out that the interbank foreign exchange market is open from 9:00 to 16:00 hours GMT on all business days.
The BoG is exempt from this clause and may trade with an LFXD outside the regular market hours.
Additionally, each licenced foreign exchange dealer is required to update indicative quotes for buying and selling US dollars at regular intervals, on the Reuters and Bloomberg information systems, while indicative quotes should be updated at intervals of not more than 30 minutes to show the price at which a market-maker is prepared to buy and sell at the minimum traded lots.
By Samuel Boadi