Bank of Ghana (BoG) Announces Foreign Exchange Forward Auction

Bank of Ghana (BoG) Announces Foreign Exchange Forward Auction

April 26, 2022

BoG recently announced a foreign exchange forward auction limited to a thirty-day tenor. The amount on offer by the bank is US$100 million dollars. The Auction shall be held under the following conditions and guidelines.

  1. Banks are to ensure that participation in the auction is limited to qualifying Bulk Oil Distributing Companies(BDCs) based on the following conditions:
  2. There must be evidence of a valid licence issued by the National Petroleum Authority (NPA)
  3. They must be in good standing with the NPA (i.e., no regulatory encumbrances).
  4. They must provide evidence of a contract indicating volumes and cost of the products including premiums or discounts applied, as well as payment due dates.
  5. Contracts must be valid for the current window between 1st and 15th April 2022.
  6. There must be evidence of sales to Oil Marketing Companies within the last three months.
  7. BDCs are to deposit all sales proceeds into an escrow account with their bidding banks for the window in which they participate in an auction to be closely monitored.
  8. Banks are required to pass on forex(FX) won by BDCs at the winning bid rates with no spreads.
  9. Bank of Ghana reserves the sole right to auction allocation.
  10. All results announced are final.

Bids are invited as per the above-listed guidelines to purchase the United States dollars against the Ghana cedis, separately on each auction date. 

BoG intended to sell $100 million in April 2022 but sold $104 million at 7.39 cedis per dollar instead. BoG is also scheduled to sell $150 million in May 2022 and $100 million in June 2022 as well. The Central bank further stated that it will publish an auction calendar for the Foreign Exchange Forward Auction quarterly.

The auction is expected to boost the supply of dollars on the market to improve the stability of the local currency. In addition, the auction will aid price recovery and reduce the uncertainty of future availability of the foreign exchange to meet the need of the bank’s clients.

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