The Bank of Ghana secured more bids than the amount of dollars available to be auctioned through its forward sale of forex.
The Bog got about 61 million dollars’ worth of bids from banks and dealers but sold $25 million 29th of October 2019.
Forty-three bids came from banks and dealers that were seeking GH¢42.7 in 7 days. However, the Bank of Ghana was prepared to sell $12.2 million by accepting 19 bids.
This is being offered within the accepted bid range of GH¢5.36 and GH¢5.37.
Banks and dealers that were seeking to be supplied $13.2 million in I9 days, however just got $9.2 million from the Bank of Ghana. $3 million was supplied at an exchange rate of GH¢5.35 –GH¢5.37 to dealers and banks that were looking for FX in 30 days.
This is despite these firms seeking about $3.5 million. $1 million was being sought by investors in 45 days at an exchange rate of GH¢5.36, but the regulator just gave them $500, 000.
How is the Bank of Ghana planning to forward sale its dollars over three months ending December 2019?
According to the Bank of Ghana, the Foreign Exchange Forward rate Auction is limited to 7-day, 15-day, 30-day, 45-day, 60-day and 75-day tenors starting on October 01, 2019.
The Central Bank also said, in addition to the Auction guidelines, 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.
Bank of Ghana on this new initiative
Speaking to JoyBusiness, Head of Financial Markets at the Bank of Ghana, Stephen Opata noted that the initiative would help business plan for their forex needs.
He said, “It creates more certainty for clients for future FX needs and alleviates unnecessary pressure on the spot FX market”.
Mr Opata indicated that it is another window to provide foreign exchange to bank clients based on verified commitments.
He added that this move is an ongoing reform to streamline operations of the foreign exchange market.
According to the Bank of Ghana, it would issue a one week notice, before the sale of these forexes, for businesses and commercial banks. This would also allow businesses and banks to plan properly for their forex needs; a development that would help reduce pressure on the spot market. Mr Opata added that after the first forward auction on October 1, the regulator plans to come out with a calendar for further sales.