The Bank of Ghana has adopted a strategy to mitigate the perennial depreciation of the local cedi currency which has become a nightmare for the business community, APA has learnt on Monday.
As a result of that the apex bank will auction $715 million in Forward Foreign Exchange Auctions in the whole of 2020.
The months with the expected highest auctions of $80 million each are January, February and March 2020.
In accordance with the Foreign Exchange Forward Auction guidelines issued on the 23 September 2019, the Bank of Ghana said bids are invited as per the prescribed format to purchase or sell US dollars against Ghana’s cedi separately on each auction date.
The move to auction such an amount of US dollars is expected to help arrest, to some extent, the perennial depreciation of the cedi which usually throws the economy out of gear.
Following recent trends, the cedi is expected to depreciate by about 13 percent to the US dollar before the end of 2019.
The Bank of Ghana, in October, began a Foreign Exchange Forward Rate Auction limited to 7-day, 15-day, 30-day, 45-day, 60-day and 75-day tenors.
Additionally, all authorised foreign exchange dealer banks were to comply with the provisions of the code of conduct for the interbank foreign exchange market in Ghana.
Since the introduction Foreign Exchange Forward Rate Auction, it has recorded a significant oversubscription.
The measures are being adopted to curtail frequent shortage of dollars in within the economy which results in high exchange rates and smuggling of the US currency out of Ghana by foreign businesses to their countries.
DAP/as/APA