Home Finance Stop Posting Rates on Social Media; BoG Tells Forex Bureaux

Stop Posting Rates on Social Media; BoG Tells Forex Bureaux

Stop Posting Rates on Social Media; BoG Tells Forex Bureaux as it Cracks Down on Illegal Activities to Stabilise Cedi

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Stop Posting Rates on Social Media; BoG Tells Forex Bureaux

The Bank of Ghana (BoG) is working harder to stop illicit activity in the foreign exchange market. It announced plans to enforce regulatory compliance among banks, and forex bureaux, in a bid to clamp down on black market operators.

BoG Governor Dr Ernest Addison described the steps being taken to counteract illicit forex market activities, which the Bank believes are causing the cedi’s depreciation, during a press conference to announce the policy rate’s retention at 29%. Dr. Addison noted.

“The exchange rate has recently come under some pressure, especially in the forex bureaux market.”

He emphasized that the Bank was working with the Financial Intelligence Center to clean up the foreign exchange market and that it was aware of illicit activity. “We intend to intensify our oversight of Forex bureaus to guarantee adherence to their established regulations,” he declared. As a result, he issued a warning to all Forex Bureaux promoting rates on social media and outside their locations to stop doing so right now.

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Dr. Addison also declared the formation of a task force to oversee Forex Bureau compliance.

In the interbank market, the cedi has lost about 14.6% of its value concerning the US dollar, while in the retail market, it has lost more than 19%. The interbank market opened at values between 14.75 and 14.85, however, certain forex bureaus are now selling the dollar at 15.75. The BoG’s justification of Cedi’s depreciation aligns with previous statements from market watchers and Finance Minister Dr. Mohammed Adam.

Dr Addison clarified that “a weakening of the current account surplus due to higher import demand and lower export revenue, particularly a sharp decline in cocoa export earnings” is the cause of the recent pressure on exchange rates.

He added that the pressure on the currency has been exacerbated by large public spending on capital expenditure and arrears to Independent Power Producers (IPPs).
Reducing “the pipeline demand” from commercial banks, the BoG has taken action in recent weeks to directly meet the foreign exchange needs of certain corporate organizations. To reduce the incentives for using black markets, the Central Bank is also collaborating with the Ghana Association of Banks to simplify the documentation requirements for international payments.

Reiterating the Central Bank’s commitment to maintaining the cedi’s stability, Dr Addison cautioned against making remarks that would erode public confidence in the economy, especially during an election year.

He issued a warning, saying, “Sentiments and pronouncements also affect the foreign exchange market.” It will become clear in the following days whether these declarations and actions will actually stop the Cedi’s depreciation and drastically slow down its rate of collapse.

Vesta Daily
Author: Vesta Daily

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