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Tag: Bank of Ghana

  • Cedi rally on no ‘haircut’ for bonds pledge may be short-lived

    The Cedi recovered strongly against the dollar, appreciating to 13 from 14.05 at last week’s close after President Nana Akufo-Addo said bondholders won’t suffer losses as part of any IMF bailout.

    The recovery was aided by a Bank of Ghana clampdown on illegal FX traders. Dollar demand remains heavy ahead of the Christmas period as importers seek to pay for goods in time for the festive shopping season. We expect the currency’s recovery to be short-lived, with rising inflation and high debt levels driving the Cedi back to the 14 levels in the near term.

    Twin priorities for Africa leaders at COP27

    With Africa contributing only around 3% of global emissions but devastated by extreme weather, such as recent floods displacing millions and destroying farmland across west Africa, the continent’s leaders have two core objectives at the UN’s COP27 climate conference next week.

    The first is that developed nations should pay reparations for the impact that climate change is having on Africa, with the funds used to build infrastructure that will be more resilient against extreme weather and support transition to renewable energy.

    The second objective is to strike a balance between calls for a global halt to new fossil fuel projects and the priorities of economic development in Africa and the need for new sources of oil and gas to address energy shortages in Europe. Progress on either of these broad objectives could provide relief for Africa’s economies and currencies.

    Naira tumbles to new low as CBN to void high-value notes

    The Naira plunged to a new low against the dollar on the unofficial market, trading at 850 from 772 at last week’s close. Nigerians rushed to buy dollars after the central bank said it plans to redesign high value Naira notes by mid-December and void any old notes still in circulation by the end of January next year.

    The spread between the official and unofficial rates is now more than 88%, the largest ever gap, according to Bloomberg. The note redesign is intended to mop up excess funds, reduce counterfeit notes and hamper ransom payments from terrorists and kidnappers.

    The central bank has expressed concern about the amount of currency in circulation outside of the banking system, reducing the efficacy of its policy levers. With dollar demand continuing to outpace supply, and with no more central bank support in the parallel market, we expect the Naira to lose further ground in the near term.

    Rand loses ground on Fed hike

    The Rand weakened against the dollar, trading at 18.27 from 18.12 at last week’s close after the US Federal Reserve raised interest rates by another 75 basis points to its highest level in 14 years.

    The Rand had been trading even lower at the start of the week, briefly touching 18.40, before recovering slightly amid renewed optimism about China’s economic outlook. Domestic concerns also continue to pile pressure on the local unit, such as ongoing power cuts and uneven taxation (with about 4% of the population being responsible for 84% of the country’s tax receipts).

    We expect the Rand to continue trading in the 18s in the week ahead, though it is unlikely to weaken beyond 18.50.

    Egypt Pounds plunges to record on flexible FX move

    The Pound depreciated sharply against the dollar, hitting a fresh record low of 24.15 from 19.67 at last week’s close after the country signalled it was moving to a flexible exchange rate as part of the $3bn IMF loan deal agreed last Thursday.

    The Pound’s weakening is likely to fuel inflation, which hit a four-year high of 15% in September. Egypt’s economy has been struggling from the twin effects of the Covid-19 pandemic and commodity price shocks caused by Russia’s war in Ukraine.

    That has sparked a foreign investor exodus that is putting more pressure on the Pound, which we expect to sink further in the weeks ahead as the currency floats more freely and adjusts to market based levels.

    Kenyan Shilling at new low set for further losses

    The Shilling declined to a fresh record low, trading at 121.35/121.55 from 121.15/121.35 at last week’s close amid the familiar trend of elevated dollar demand from energy and manufacturing businesses that is outpacing supply.

    The central bank continued to support the currency using its dollar reserves, preventing a larger slide. FX reserves fell to just under $7.3bn from slightly above a week earlier.

    We expect the Shilling to weaken further in the week ahead as the US Federal Reserve’s 75 basis point hike this week strengthens the dollar.

    Ugandan Shilling to weaken on debt concerns

    The Shilling strengthened against the dollar, trading at 3770 from 3808 at last week’s close. Energy Minister Ruth Nankabirwa Ssentamu said Uganda plans to start pumping its oil reserves in 2025, with the country likely to court Chinese investment to finance the East African pipeline project.

    Meanwhile, African health officials said the Ebola outbreak is under control due to successful contact-tracing efforts. The World Health Organization upped its Ebola risk assessment for the country and the wider region as infections reached the capital Kampala. The currency’s stronger showing may be short-lived.

    We expect concerns about Ugandan debt levels will cause the Shilling to depreciate in the coming days.

    Shilling stable as Tanzania President visits China

    The Shilling was broadly unchanged against the dollar, trading at 2332 from 2331 at last week’s close. Petrol prices dropped for a third month in a row at the start of November, supported by the government’s TZS200bn fuel subsidy.

    While that handout is protecting Tanzanians from inflationary strains, there are concerns about the sustainability of the subsidy and the potential long-term effects it could have on the economy. President Samia Suluhu Hassan is visiting China this week as Tanzania seeks to drum up investment for the East African oil pipeline that will pump crude from Uganda through to Tanzania’s Tanga port. We expect the Shilling to be more volatile against the dollar in the days ahead following the US Federal Reserve’s latest rate hike.

    Source: Ghanaweb

  • Forex Bureaus sell $1 at GH¢14.20, BoG GH¢13.01 as of November 4

    On the Interbank forex rates from the Bank of Ghana as of November 4, 2022, the Ghana Cedi is trading against the dollar at a buying price of 13.0017 and a selling price of 13.0147.

    As compared to yesterday’s trading of a buying price of 13.0029 and a selling price of 13.0159. At a forex bureau in Accra, the dollar is being bought at a rate of 13.70 and sold at a rate of 14.20.

    Against the Pound Sterling, the Cedi is trading at a buying price of 14.5346 and a selling price of 14.5517 as compared to yesterday’s trading at a buying price of 14.9026 and a selling price of 14.9188.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 14.50 and sold at a rate of 15.50.

    The Euro is trading at a buying price of 12.6818 and a selling price of 12.6945 as compared to yesterday’s trading at a buying price of 12.8545 and a selling price of 12.8674.

    At a forex bureau in Accra, Euro is being bought at a rate of 12.65 and sold at a rate of 13.55.

    The South African Rand is trading at a buying price of 0.7065 and a selling price of 0.7071 compared to yesterday’s trading at a buying price of 0.7140 and a selling price of 0.7148.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.65 and sold at a rate of 1.10.

    The Nigerian Naira is trading at a buying price of 34.0301 and a selling price of 34.0862 as compared to yesterday’s trading at a buying price of 33.9923 and a selling price of 34.0523.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 14.50 Naira for every 1 Cedi and sold at a rate of 18.50.

  • FLASHBACK: BoG’s action on collapsed banks saved 3,500 jobs —2nd Deputy Governor

    Mrs. Elsie Addo Awadzi, the second deputy governor of the Bank of Ghana, highlighted that 3,500 jobs were preserved as a result of the Central Bank’s decision to dissolve and combine about seven failed banks to form the Consolidated Bank Ghana Ltd.

    “The Government’s decision to guarantee the deposits of the seven bankrupt banks, BoG’s measures against those institutions, and the establishment of CBG have all contributed to reducing the severity of the potential negative effects of these collapses.
    There are frequently many victims when banks collapse, and if they are not properly managed, this might cause serious issues for the financial system and the overall economy.

    The interventions of the BoG and Ministry of Finance (MoF) minimised job losses by saving some 3,500 or 70% of approximately 5000 employees of the defunct banks,” she said.

    Second Deputy Governor of the Bank of Ghana, Mrs. Elsie Addo Awadzi, has said that the bank’s intervention on collapsing and merging the seven defunct banks to form the Consolidated Bank Ghana Ltd saved some 3,500 jobs.

    Some have called the central bank’s decision to collapse and merge the seven defunct banks ill-timed and disastrous, as it has led to some 1,500 job losses.

    But speaking at the Joy FM Financial Sector Forum held in Accra, Mrs. Awadzi justified the central bank’s decision, saying it rather minimised the job losses by 70 percent, which otherwise would have been lost if the action was not promptly taken.

    “BoG’s actions against the failed banks and Government’s decision to guarantee the deposits of the seven banks and the creation of CBG have helped to mitigate what could have been severe adverse consequences from these failures. When banks fail, there are usually a lot of casualties which, if not well managed, could lead to significant problems for the financial sector and the economy.

    The interventions of the BoG and Ministry of Finance (MoF) minimised job losses by saving some 3,500 or 70% of approximately 5000 employees of the defunct banks,” she said.

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    She added that the banking sector reforms have boosted the confidence of local and international investors and other market players, and have contributed to the recent upgrades of Ghana’s credit rating by Standards and Poors (S&P) to B- to B.

    Also addressing why there was the need to take such strong action against the banks, Mrs. Awadzi said the banks posed a significant risk to the economy and had to be helped to exit the market in an orderly fashion, especially, considering the extent of distress they were in.

    “Failed banks become serious sources of risk for the entire financial system and the economy as a whole, and must be made to exit before they collapse the whole system. What happens to the financial system affects everyone.

    The defunct banks had reached a point where they were no longer able to operate as banks. 4 of the 7 had been found to be significantly undercapitalized as of the 2015/16, and subsequently became insolvent when their capital was further impaired due to bad loans and other irrecoverable assets.

    The other 3 defunct banks obtained their licenses by false pretences through the use of suspicious and non-existent capital, which rendered them significantly undercapitalized compared to the minimum of GH¢120 million they were required to have,” she said.

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    Going forward, the BoG will continue to strengthen its supervisory and regulatory role to ensure such a situation does not repeat itself.

    “On our part, we are strengthening our regulatory and supervisory capacity through improved systems, processes, accountability, and training, to enable our supervision staff to better monitor banks’ performance and conduct, and ensure that banks take prompt corrective action to address emerging risks.

    We are working with all stakeholders to rebuild confidence in our banking sector. There are great opportunities ahead for the industry to drive Ghana’s economic growth agenda, and we expect to see banks positioning themselves for these opportunities,” she said.

  • Cedi depreciation: ‘BoG’s illegal money to government chasing the dollar’ – Adongo

    Isaac Adongo, a member of parliament for Bolgatanga Central, claims that the Bank of Ghana illegally injected Ghana cedis into the economy, which is the cause of the cedi’s ongoing decline versus the dollar.

    Mr. Adongo claimed that the central bank’s disobedience of and disdain for the law regarding budget funding is to blame for the issue.

    “Last year, 2021, they ended the year with 35 billion Ghana cedis, and as we speak today, they are heading toward the same 35 billion, which would bring it to 70 billion. When you do that, there are two things that happen. One is that monies that you have pumped into the economy, the cedi in the economy, is what is chasing the dollar now,” Mr. Adongo told Starr News

    He continued: “If you have over 70 billion of monies that do not belong to the economy, in the economy and chasing the dollar, the dollar would definitely collapse the cedi. That is caused by the Bank of Ghana itself. Two, when you do that, then you need to mop up the excess liquidity; you need to find a way to get that money back into the banking sector and probably back to the Bank of Ghana.

    In doing so, you must continuously increase the policy rate. Now, in the end, it is the businessman who gets hurt because he must be able to find a business that can give him 35% of returns of margins to pay the interest and even leave something to survive on.”

    According to Mr. Adongo, the Central Bank’s action has therefore resulted in an increase in interest rates and the cost of doing business.

  • Cedi performance unpredictable, stability may continue – Analyst

    A lead researcher at GCB Capital and a Currency Analyst, Courage Boti, has noted that the cedi may see some stability in the coming weeks.

    He noted that this may continue as the Bank of Ghana’s rate may become the base rate for exchange.

    The cedi is currently selling at GH¢13.50 at various forex bureaus in the country.

    “I expect that this trend could continue until we get to the ¢13 levels and then that is when you will receive some sense of stability because the Bank of Ghana rate would become the floor or the lowest level. The thing really is that you don’t want to see some volatility. I guess it might fall to the interbank rate now [¢13.001] and stabilize around that level,” he is quoted by myjoyonline.com.

    The analyst also noted that it would be difficult to predict due to its performance in recent times. The cedi depreciated by more than 50% in the past few weeks.

    “I think it is quite unpredictable because we are still not out of the wounds yet. I think we are doing about 50% depreciation now and I see the cedi ending the year around that level. It shouldn’t be significantly different from the ¢13, the ¢13.5 levels by end of the year as things stand. That is for me to say that there could be some more appreciation to come in the next few weeks before stability,” he stated.

    “So, if there is a reversal in trend, it should go back to 13.50 as things stand now. But I must add cautiously that the trends and market dynamics are still very uncertain and it is very difficult to pinpoint the rate at the cedi would end of the year,” he added.

    Source: Ghanaweb

  • Forex Bureaus sell $1 at GH¢13.50 BoG GH¢13.01 as of November 2

    On the Interbank forex rates from the Bank of Ghana as of November 2, 2022, the Ghana Cedi is trading against the dollar at a buying price of 13.0019 and a selling price of 13.0149.

    As compared to yesterday’s trading of a buying price of 13.0021 and a selling price of 13.0151. At a forex bureau in Accra, the dollar is being bought at a rate of 12.95 and sold at a rate of 13.50.

    Against the Pound Sterling, the Cedi is trading at a buying price of 14.9041 and a selling price of 14.9203 as compared to yesterday’s trading at a buying price of 14.9459 and a selling price of 14.9622.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 14.00 and sold at a rate of 14.90.

    The Euro is trading at a buying price of 12.8545 and a selling price of 12.8674 as compared to yesterday’s trading at a buying price of 12.8545 and a selling price of 12.8674.

    At a forex bureau in Accra, Euro is being bought at a rate of 12.30 and sold at a rate of 13.50.

    The South African Rand is trading at a buying price of 0.7121 and a selling price of 0.7128 compared to yesterday’s trading at a buying price of 0.7075 and a selling price of 0.7081.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.65 and sold at a rate of 1.10.

    The Nigerian Naira is trading at a buying price of 33.9765 and a selling price of 34.0565 as compared to yesterday’s trading at a buying price of 33.9937 and a selling price of 34.0775.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 16.00 Naira for every 1 Cedi and sold at a rate of 20.00.

  • Cedi depreciation: BoG’s illegal money to govt chasing the dollar – Adongo

    Isaac Adongo, a member of parliament for Bolgatanga Central, claims that the Bank of Ghana illegally injected Ghana cedis into the economy, which is the cause of the cedi’s ongoing decline versus the dollar.

    According to Mr. Adongo, the issue arises as a result of the Bank of Ghana’s disobedience and contempt for the regulations governing the Central Bank’s funding of the budget.

    “The key strand of Ghana’s inflationary targeting framework is what we call fiscal dominance over monetary policy. What this means is that the Bank of Ghana should be restrained from giving money to the government to finance the budget. That is why its law stipulates that they cannot give more than 5% of government’s previous year’s revenue at any point in time in cumulative lending,” he explained.

    “Last year, 2021, they ended the year with 35 billion Ghana cedis, and as we speak today, they are heading toward the same 35 billion, which would bring it to 70 billion. When you do that, there are two things that happen. One is that monies that you have pumped into the economy, the cedi in the economy, is what is chasing the dollar now,” Mr. Adongo told Starr News

    He continued: “If you have over 70 billion of monies that do not belong to the economy, in the economy and chasing the dollar, the dollar would definitely collapse the cedi. That is caused by the Bank of Ghana itself. Two, when you do that, then you need to mop up the excess liquidity; you need to find a way to get that money back into the banking sector and probably back to the Bank of Ghana.

    In doing so, you must continuously increase the policy rate. Now, in the end, it is the businessman who gets hurt because he must be able to find a business that can give him 35% of returns of margins to pay the interest and even leave something to survive on.”

    According to Mr. Adongo, the Central Bank’s action has therefore resulted in an increase in interest rates and the cost of doing business.

  • FLASHBACK: Forex Bureaux to demand voter’s ID, passport or a driver’s license before transactions

    Any person wishing to exchange one currency for another must provide a voter identity card, passport, national identification card, or driver’s license, according to Bank of Ghana regulations from 2018.

    The purpose of the action was to protect the nation from financial crimes and create an audit trail of the transactions made by FX traders.

    A visit to the forex bureau to exchange one currency for another will require one to provide valid identification including voter’s ID, passport, national identification card, or driver’s license.

    The directives according to the Bank of Ghana (BoG) are aimed at providing an audit trail of the forex traders’ business history and secure the country against financial crimes.

    The central bank also wants forex bureau operators to complete and submit a licence renewal questionnaire two months before the expiration of their licences with the questionnaire expected to be submitted together with a copy of a tax clearance certificate.

    A copy of insurance certificate and extract of audited accounts, bank statements and proof of filing of annual returns at the Registrar General’s Department are also expected to be attached to the required documents.

    The central bank also directs all purchases and sales of forex to be captured electronically and receipted accordingly by licensed Forex Bureaux.

    Licensed Forex Bureaux are also to comply with the provisions of the Data Protection Act, 2012 (Act 843) and must register with the Data Protection Commission of the Ministry of Communication as a key requirement for annual license renewal.

    They are also to adhere to the Forex Bureau Regulations issued in accordance with the Foreign Exchange Act, 2006 (Act 723), and the provisions of the Anti-Money Laundering Act, 2008 (Act 749).

    Failure to heed the instructions will lead to penalties including pecuniary sanctions, suspension, and revocation of license in accordance with the Foreign Exchange Act 2006, (Act 723), the released notice held.

  • Cedi Rates: Forex Bureaus sell $1 at GH¢13.55 BoG GH¢13.01 as of November 1

    On the Interbank forex rates from the Bank of Ghana as of November 1, 2022, the Ghana Cedi is trading against the dollar at a buying price of 13.0021 and a selling price of 13.0151.

    As compared to yesterday’s trading of a buying price of 13.0026 and a selling price of 13.0156. At a forex bureau in Accra, the dollar is being bought at a rate of 12.85 and sold at a rate of 13.55.

    Against the Pound Sterling, the Cedi is trading at a buying price of 14.9459 and a selling price of 14.9622 as compared to yesterday’s trading at a buying price of 15.0583 and a selling price of 15.0747.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 14.20 and sold at a rate of 16.00.

    The Euro is trading at a buying price of 12.8545 and a selling price of 12.8674 as compared to yesterday’s trading at a buying price of 12.9267 and a selling price of 12.9385.

    At a forex bureau in Accra, Euro is being bought at a rate of 12.40 and sold at a rate of 13.50.

    The South African Rand is trading at a buying price of 0.7075 and a selling price of 0.7081 compared to yesterday’s trading at a buying price of 0.7159 and a selling price of 0.7166.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.65 and sold at a rate of 1.10.

    The Nigerian Naira is trading at a buying price of 33.9937 and a selling price of 34.0775 as compared to yesterday’s trading at a buying price of 33.9522 and a selling price of 33.9783.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 16.00 Naira for every 1 Cedi and sold at a rate of 20.00.

  • Cedi on path to recovery and stability – Analyst

    The cedi’s dark days appear to be over, at least until the end of the year, with market movements over the last week. There is a showing sign of sustained recovery that could bring major relief to traders, market players including bankers and ordinary citizens who only crave stability in the currency regime.

    The local currency, which traded as high as GH¢15 to the USD some two weeks ago on the interbank markets and almost GH¢16 on the retail market has made some gains after several regulatory and government interventions. The cedi is currently trading between GH¢13- GH¢14 on both markets.

    According to Ashley Thompson-MacCarthy, The Executive Director at Obsidian Achernar Limited, a leading Financial Services and Africa-Focused firm, events from last week and the beginning of this week, coupled with the advanced nature of negotiations with the International Monetary Fund (IMF) for a programme, shows that the worst of the depreciation is over, and Ghanaians can look forward until at least the end of the year with some optimism about the currency.

    “We believe that the worst is over, and the currency will strengthen against the greenback (US Dollar). We will see prices stabilise and even appreciate to the levels of GH¢11.5 to US$1. That is what we believe,” he said, sounding highly optimistic.

    “We think the currency is undervalued due to perception that we do not have a structured economy. And we have seen prices across bond yields reflect that lack of confidence. However, in the last week or so, we have seen bond yields drop marginally. And we believe this is a sign of things to come,” Mr. Thompson-MacCarthy noted.

    Last week, the Central Bank revoked the licences of some forex bureaux which have been flouting sections of the Foreign Exchange Act. Also, black market operators who have no licence are being clamped down. In addition to these moves, the Bank of Ghana announced the receipt of more than a US$1billion in forex via a loan from Afreximbank and the first tranche of the cocoa syndicated loan.

    These moves have calmed the markets and has seen individuals and corporates which have been hoarding the US currency as a store of value begin to release their dollars.

    “Some weeks ago, there was an unusual high demand for dollars by people who ordinarily would not be demanding dollars. This led to the rapid deprecation but the moves by the regulator have changed the mood and over the past seven days, we have seen a flush of USD on the market,” he added.

    America’s likely recession/IMF negotiations

    With several economists and market analysts predicting a likely recession in the United States in the coming months, Mr. Thompson-MacCarthy believes this could auger well for developing economies such as Ghana.

    “The retracement of cedi’s free fall is also bringing back international investors into our market. On the talks that the United States are going into a recession, these international investors are looking for yields, they are looking for where to invest and we see that Ghana is undervalued.

    Typically, when countries enter into an IMF programme, we should see the currency stabilise and so we are going into that period where we believe that the worst is over. Whereas if you look at the West, especially a country like America, its Dollar Price Index, dropped from 113 to as low as 109. Today it is stabilising around 111. This shows that there is volatility in America.

    “Having a well-diversified investment portfolio is strategic. We believe that a major part of the gains from keeping cash dollars have been crystallized on our market. As the dollar begins to weaken globally, it will be good to take advantage of other asset classes like Government bonds that are heavily discounted and make a good entry. Also, there are options like commodities, property and real estate markets that provide leverage that is currently untapped in our country,” he added.

    December in GH

    With the Year of Return raking in almost US$2billion in 2019, according to official data, the government has introduced a comprehensive December in GH plan that seeks to make Accra and Ghana the holiday destination of Africa. With the worst days of the pandemic over, this December primes to be a gamechanger.

    This, Mr. Thompson-MacCarthy believes would also bring in some good FX to support the local currency. “Our biggest asset, which we do not talk about much is peace. The fact that we have political stability means we can attract foreign investment and tourism opportunities that bring in very good FX for the economy. We must cherish this and make it a mainstay of the economy.”

    The authorities should endeavour to make sure that the impending FX from the end-of-year activities are routed through regulated channels, he added.

    Source: Ghanaweb

  • Enough liquidity available till IMF programme takes off – BoG Governor assures

    Dr. Ernest Addison, the governor of the Bank of Ghana, has assured that the central bank has enough cash on hand to maintain the economy’s general stability until the start of the anticipated IMF program and other financing guarantees anticipated from stakeholders.

    He asserts that efforts are being made to ensure that the central bank has some liquidity, notwithstanding the continuing economic difficulties that the entire globe and Ghana in particular are experiencing.

    As everyone knows, we received the 750 million dollars from the AfriExim Bank, and on October 26, 2022, we will receive the 790 million dollars from the COCOBOD syndicated loan, providing some liquidity for the Central Bank.

    “I am aware of the recent developments in terms of liquidity in the banking sector. As I said, I took note of the advice from Washington on the financial stability issue that there has to be targeted liquidity support to preserve financial stability without undermining the inflation control objectives. So, this is really the context we should have the discussion on all the complaints of we need liquidity and BoG not supplying liquidity.”

    Dr Ernest Addison further said he has held engagements with Chief Executive Officers of banks to assure them there is enough liquidity which will be provided to them.

    “Yesterday I met the CEOs and I have assured them that we will provide the necessary liquidity to ensure that we don’t have a system of a liquidity problem. But we do that within the context of keeping inflation low”.

    The Governor made this statement when the management of the Bank met with stakeholders within the foreign exchange market, including the Managing Directors of the universal banks in the country.

    Also present at the meeting were the Association of Forex Bureau Operators to deliberate on measures to streamline, sanitise and provide clarity on the supply of forex in the country.

  • We are not engaged in any illegal transfer of funds offshore – BoG refutes claims

    The Bank of Ghana has denied allegations that it actively worked with some operatives at Cowlane in Accra to transfer money illegally overseas.

    This comes after Dr. Kwabena Nyarko Otoo, Director of Research at the Trades Congress (TUC), claimed there was “proof or rising suspicion” of the aforementioned behavior.

    On the Joy News TV program Newsfile on October 29, Dr. Otoo made the assertions.

    But the Central Bank in a statement sighted by GhanaWeb categorically denied the allegations and also considered them as extremely reckless on the part of Dr. Kwabena Nyarko Otoo.

    “We would have expected that such strong allegations would have been supported by the requisite evidence, and not left at pure conjecture, mere suspicion or hearsay. This is especially so considering the quarters from which the allegations were made,” the statement said.

    “We advise the general public to completely disregard these comments and be assured that we, as a Central Bank, are focused on our mandate of price stability, and doing all within our power to reduce the rising general level of prices. We are doing this guided by our core values of accountability, professionalism and integrity, and in accordance with law,” the BoG added.

    The Bank of Ghana, therefore, urged the public to desist from making such unfounded allegations in the future.

    It further assured collaboration with relevant stakeholders including law enforcement agencies to discourage and penalize the activities of illegal foreign exchange operators in the country.

  • Cedi Depreciation: We’ll flush out all illegal forex operators – Akufo-Addo

    According to President Akufo-Addo, actions being taken to stop the cedi’s depreciation will not stop, and this includes shutting down forex operators who are not in compliance.

    In his speech to the country on October 30, 2022, President Akufo-Addo promised that the government will not give up on efforts to prevent the cedi from losing value relative to other major currencies.

    “In fact, actions have been made to bring order back to the foreign exchange markets, and we are already starting to notice a restoration of calm.
    We won’t give up until the order is fully reinstated. The following steps have already been taken:

    “Enhanced supervisory action by the Bank of Ghana in the forex bureau markets and the black market to flush out illegal operators, as well as ensuring that those permitted to operate legally abide by the market rules.”

    According to him, “already some forex bureaus have had their licenses revoked, and this exercise will continue until complete order is restored in the sector;

    “Fresh inflows of dollars are providing liquidity to the foreign exchange market, and addressing the pipeline demand;

    “The Bank of Ghana has given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continue to run in a stabilized manner, till the IMF Programme kicks in and the financing assurances expected from other partners also come in.”

    Meanwhile, the Bank of Ghana has revoked the license of Trade House and Airport City Forex Bureaux Limited in Accra effective October 27, 2022.

    The move is in accordance with the provisions of Sections 11 (1) and 12 (f) of the Foreign Exchange Act 2006 (723).

    Also, the action was based on the Non-compliance with rules governing the operations of the foreign exchange bureau including directives on customer identification and issuance of electronic receipt (Bank of Ghana Notice Number: BG/GOV/SEC/2018/16),

    (i)The Bank of Ghana reserves the right to revoke the license of any forex bureau if: in the Bank’s opinion, the conduct of any forex bureau is detrimental to the success of the Forex Bureau Scheme.

  • Gov’t announces 5 measures to stop free fall of cedi

    The Government of Ghana has adopted five measures to prevent further free fall of the cedi.

    President Akufo-Addo announced these measures on Sunday, when he addressed the nation on the country’s current economic crisis.

    The measures he said are:

    1. Enhanced supervisory action by the Bank of Ghana in the forex bureau markets and the black market to flush out illegal operators, as well as ensuring that those permitted to operate legally abide by the market rules. Already some forex bureaus have had their licenses revoked, and this exercise will continue until complete order is restored in the sector.
    2. Fresh inflows of dollars are providing liquidity to the foreign exchange market, and addressing the pipeline demand;
    3. The Bank of Ghana has given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continue to run in a stabilized manner, till the IMF Programme kicks in and the financing assurances expected from other partners also come in;
    4. Government is working with the Bank of Ghana and the oil-producing and mining companies to introduce a new legal and regulatory framework to ensure that all foreign exchange earned from operations in Ghana are, initially, paid to banks domiciled in Ghana to help boost the domestic foreign exchange market; and
    5. The Bank of Ghana will enhance its gold purchase programme.

    President Akufo-Addo said he was confident that “these immediate measures designed to change the structure of our balance of payment flows, sanitise the foreign exchange market to ensure that the banks and forex bureaus operate along international best practices, together with strengthened supervision, will go a long way to sanitise our foreign exchange market, and make it more resilient against external vulnerabilities going forward.”

    The cedi was tagged by Bloomberg as the worst-performing currency in 2022 with its trading value at around GH¢14 to a dollar.

    Prices of products such as fuel, cooking oil, rice and other imported items have gone up astronomically within the last few weeks following the depreciation of the cedi.

    The continuous free fall of the cedi compelled the Ghana Union of Traders Association (GUTA) to declare a strike to force government to take steps to strengthen the currency.

     

     

     

  • Cedi: Closure of Forex Bureaux for non-compliance will go on – Akufo-Addo

    President Nana Addo Dankwa Akufo-Addo has said the exercise to close down forex bureaux that are not complying with the regulations will continue.

    This forms part of the measures being introduced by the government to tackle the economic challenges especially the Cedi’s poor performance against the Dollar.

    Mr Akufo-Addo said in his address to the nation on Sunday October 30 that “The following actions have been taken thus far: 1) enhanced supervisory action by the Bank of Ghana in the forex bureau markets and the black market to flush out illegal operators, as well as ensuring that those permitted to operate legally abide by the market rules.”

    “Already some forex bureaus have had their licenses revoked, and this exercise will continue until complete order is restored in the sector,” he said.

    The other measures are “Fresh inflows of dollars are providing liquidity to the foreign exchange market, and addressing the pipeline demand;

    “The Bank of Ghana has given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continue to run in a stabilized manner, till the IMF Programme kicks in and the financing assurances expected from other partners also come in;

    “Government is working with the Bank of Ghana and the oil producing and mining companies to introduce a new legal and regulatory framework to ensure that all foreign exchange earned from operations in Ghana are, initially, paid to banks domiciled in Ghana

    “The Bank of Ghana will enhance its gold purchase programme.”

    In accordance with the provisions of Sections 11 (1) and 12 (f) of the Foreign Exchange Act 2006 (723), the Bank of Ghana has revoked the licence of Trade House and Airport City Forex Bureaux Limited effective October 27, 2022.

    This was based on the Non-compliance with rules governing the operations of foreign exchange bureaux including directive on customer identification and issuance of electronic receipt (Bank of Ghana Notice Number: BG/GOV/SEC/2018/16), (i)The Bank of Ghana reserves the right to revoke the licence of any forex bureau if: in the Bank’s opinion, the conduct of any forex bureau is detrimental to the success of the Forex Bureau Scheme;

    According to the Head of Other Financial Institutions Supervision Department at the Bank of Ghana, Yaw Sapong, the exercise targeted at ensuring sanity in the forex market is expected to continue across the capital city, Accra in the Greater Accra region.

    The two forex bureaus are under the same ownership and were detected by a mystery shopping exercise by the central bank.

    The Head of Other Financial Institutions Supervision department of the Central Bank noted that they were not issuing electronic receipts and not requesting valid proof of identity.

    Mr. Sarpong said the “two bureaus on several occasions have been found not to be complying.”

    “The way they set their prices are detrimental and we think that the licenses of the two bureaus have to be revoked,” he added.

    Source: 3news.com

  • Printing new cedi notes partly to blame for high inflation – UCC lecturer

    Ghana’s current high inflation is believed to have been somewhat caused by the printing of a set of GHS100 and GHS200 notes by the Bank of Ghana in November 2019.

    A Senior Finance Lecturer at the University of Cape Coast (UCC) Business School, Seyram Kawor, who holds this notion, stated that prices of goods and services saw an upward trend when more money was pumped into the market.

    He explained that since more currency chased a limited number of goods, there was a shortage, and with demand exceeding supply, prices increased just as the law of economics prescribes.

    “We want to go cash lite society where people will not be using cash. Then, all of sudden, you’ve gone ahead to print new denominations of ₵100 and ₵200. Automatically, certain things that may be bought at ₵95 may go up to ₵100. It is natural for these things to happen.”

    “Once currencies are printed, we have prices going up. We have no justification for printing larger denominations. That is the price that we are paying for now,” he said.

    According to the Finance Minister, Ken Ofori-Atta, the printing of the notes cost $8.97 million.

    In November 2019, inflation stood at 12.2%. After more cedis were printed, inflation fell to 7.8% in January 2020. The rate remained unchanged in the first quarter of 2020.

    In April, the rate rose to 10.6%, then to 11.3% in May. The year ended with a rate of 10.4%.

    From January to December 2021, inflation hovered between 10.4% and 12.5%. Unlike previous years, 2022 has seen inflation rise consistently, either at an increasing or decreasing rate.

    In 2020 and 2021, Ghana battled the COVID-19 pandemic. However, data from the Ghana Statistical Service (GSS) shows that inflation remained relatively stable.

    At the beginning of this year, inflation stood at 13.9%. As of September 2022, the inflation rate stood 37.2%.

    The country is still battling the virus in 2022 and, according to the government, the ongoing war between Russia and Ukraine is having an adverse impact on the economy.

    As a result, fuel prices on the world market have seen a surge. 

    Due to the many factors that affect a country’s inflation (food, transport, energy), it is uncertain how much the supply of GHS100 and GHS200 notes in the past three years has affected inflation.

    Source: The Independent Ghana

  • If you talk down the cedi, ‘it will go down’ – Akufo-Addo states, warns forex ‘speculators’

    President Nana Addo Dankwa Akufo-Addo has spoken extensively about the depreciation of the Ghana cedi.

    As part of his October 30, 2022 address on the economy, the president regretted instances where people have through unorthodox means triggered depreciation of the cedi, especially through speculation.

    He charged the populace to do all it takes to protect the cedi by way of complementing efforts that the government has so far put in place.

    “Fellow Ghanaians, as the French would say, l’argent n’aime pas le bruit, to wit, money does not like noise, sika mpɛ dede. Where there is chaos, where there is noise, where there is unrest, you will not find money.

    “If you talk down your money, it will go down. If you allow some unidentifiable person to talk down your money, it will go down,” he stressed.

    He went on to give a diagnosis of the current headache that the currency is facing and identified the role that the Black market and speculators were playing in worsening the plight of the cedi.

    “The recent turbulence on the financial markets was caused by low inflows of foreign exchange, and was made worse in the last two to three weeks, in particular, by the activities of speculators and the Black Market.

    “An anonymous two-minute audio message on a WhatsApp platform predicting a so-called haircut on Government bonds sent all of us into banks and forex bureaus to dump our cedis, and, before we knew it, the cedi had depreciated further.

    “All of us can play a part in helping to strengthen the cedi by having confidence in the currency, and avoiding speculation. Let us keep our cedi as the good store of value it is,” he stated.

    Then he delivered a word of caution to speculators: “To those who make it a habit of publishing falsehoods, which result in panic in the system, I say to them that the relevant state agencies will act against such persons,” he stressed.

    Some steps taken to restore order in the forex markets:

    1) enhanced supervisory action by the Bank of Ghana in the forex bureau markets and the black market to flush out illegal operators, as well as ensuring that those permitted to operate legally abide by the market rules. Already some forex bureaus have had their licenses revoked, and this exercise will continue until complete order is restored in the sector;

    2) Fresh inflows of dollars are providing liquidity to the foreign exchange market, and addressing the pipeline demand;

    3) the Bank of Ghana has given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continue to run in a stabilized manner, till the IMF Programme kicks in and the financing assurances expected from other partners also come in;

    4) Government is working with the Bank of Ghana and the oil producing and mining companies to introduce a new legal and regulatory framework to ensure that all foreign exchange earned from operations in Ghana are, initially, paid to banks domiciled in Ghana to help boost the domestic foreign exchange market; and

    5) the Bank of Ghana will enhance its gold purchase programme.

    “I am confident that these immediate measures designed to change the structure of our balance of payment flows, sanitise the foreign exchange market to ensure that the banks and forex bureaus operate along international best practices, together with strengthened supervision, will go a long way to sanitize our foreign exchange market, and make it more resilient against external vulnerabilities going forward,” he added.

    Source: ghanaweb.com

  • Fresh inflows of dollars providing liquidity to foreign exchange market – Akufo-Addo

    According to President Akufo-Addo, actions have been made to bring order back to the foreign exchange markets, and the nation is already beginning to experience a return of calm.

    In a speech to the nation on the economy on Sunday night, the President pledged more supervision by the Bank of Ghana in the forex bureau markets and the black market in order to root out illegal operators and make sure those who are legally allowed to operate follow by the market regulations.

    He claims that recent dollar infusions are addressing the pipeline need and supplying liquidity to the foreign exchange market.

    “The Bank of Ghana has given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continue to run in a stabilized manner, till the IMF Programme kicks in and the financing assurances expected from other partners also come in,” he added.

    According to him, government is working with the Bank of Ghana and the oil producing and mining companies to introduce a new legal and regulatory framework to ensure that all foreign exchange earned from operations in Ghana are, initially, paid to banks domiciled in Ghana to help boost the domestic foreign exchange market; and

    President Akufo-Addo further said the Bank of Ghana will enhance its gold purchase programme.

    “I am confident that these immediate measures designed to change the structure of our balance of payment flows, sanitise the foreign exchange market to ensure that the banks and forex bureaus operate along international best practices, together with strengthened supervision, will go a long way to sanitize our foreign exchange market, and make it more resilient against external vulnerabilities going forward” he said.

  • Forex Bureaus sell $1 at GH¢13.85 BoG GH¢13.01 as of October 31

    On the Interbank forex rates from the Bank of Ghana as of October 31, 2022, the Ghana Cedi is trading against the dollar at a buying price of 13.0026 and a selling price of 13.0156.

    As compared to Saturday’s trading of a buying price of 13.0028 and a selling price of 13.0158. At a forex bureau in Accra, the dollar is being bought at a rate of 13.00 and sold at a rate of 13.85.

    Against the Pound Sterling, the Cedi is trading at a buying price of 15.0583 and a selling price of 15.0747 as compared to Saturday’s trading at a buying price of 15.0481 and a selling price of 15.0658.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 14.50 and sold at a rate of 16.20.

    The Euro is trading at a buying price of 12.9267 and a selling price of 12.9385 as compared to Saturday’s trading at a buying price of 12.9848 and a selling price of 12.9978.

    At a forex bureau in Accra, Euro is being bought at a rate of 12.80 and sold at a rate of 13.70.

    The South African Rand is trading at a buying price of 0.7159 and a selling price of 0.7166 compared to Saturday’s trading at a buying price of 0.7263 and a selling price of 0.7271.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.65 and sold at a rate of 1.10.

    The Nigerian Naira is trading at a buying price of 33.9522 and a selling price of 33.9783 as compared to Saturday’s trading at a buying price of 33.9522 and a selling price of 33.9783.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 16.00 Naira for every 1 Cedi and sold at a rate of 20.00.

     

    Source: Ghanaweb

  • BoG rolling out measures to stabilise Cedi – Dr. Addison

    Following a meeting with banks and foreign exchange bureaus that resulted in feasible plans, Dr. Ernest Addison, governor of the Bank of Ghana (BoG), has reassured the market that the rapid depreciation of the cedi versus the US dollar will soon stabilize.

    The Governor claims that speculation is mostly to blame for the current steep depreciation, which has seen the local currency plunge by more than 50% against the US dollar since the beginning of the year.

    He did, however, emphasize that there would be sufficient foreign exchange availability for the market with the US$750 million from the AfriExim Bank and US$790 million from the COCOBOD syndicated loan coming online.

    “Clearly, this type of movement does not reflect changes in the fundamentals. It is clear that the market is not functioning properly. We are seeing speculations taking over under very disorderly market conditions and it appears now the black market is rather driving exchange rates. This, we cannot allow to continue,” he said when he met managing directors of commercial banks and members of the Association of Forex Bureau Operators last Tuesday.

    Dr. Addison also assured banks that the central bank has enough liquidity to supply into the system until conclusions with the International Monetary Fund (IMF) is concluded.

    “I am aware of the recent developments in terms of liquidity in the banking sector. As I said, I took note of the advice from Washington on the financial stability issue that there has to be targeted liquidity support to preserve financial stability without undermining the inflation control objectives. So this is really the context we should have the discussion on all the complaints of we need liquidity and BoG not supplying liquidity.

    “Yesterday, I met the CEOs, and I assured them that we will provide the necessary liquidity to ensure that we don’t have a system of liquidity problem. But we do that within the context of keeping inflation low,” he said.

    Dr. Addison further stated that the central bank is bent on restoring order in the forex market by making sure the interbank market takes full control to enforce regulations surrounding forex trading so as to streamline the supply of foreign currency in the country.

    The Governor, therefore, charged the Association of Forex Bureau Operators to be law compliant and cautioned them to desist from determining forex rates which had contributed to the speculation of rates, thus, creating unnecessary panic in the market, contributing to the rapid depreciation of the local currency.

    Members of the Association of Forex Bureau Operators commended the Bank of Ghana for its role in clamping down on illegal forex dealers, as they say it will bring some sanity in the sector and ensure only licensed forex operators deal in exchange transactions.

    To this effect, the bank, on Thursday, revoked the licences of two forex bureaus in Accra for breaching provisions in the Forex Bureau Act.

    The two companies – Trade House Forex Bureau Ltd and Aiport City Forex Bureau Ltd – which are under the same ownership, according to Head of Other Financial Institutions Supervision Department at the Bank of Ghana, Yaw Sapong, were not issuing electronic receipts and not taking identity cards of customers, a practice they have been previously cautioned about.

  • 2nd Deputy Governor renews support for women-inclined businesses

    In light of the crucial role that small businesses play in economic development, the Bank of Ghana (BoG) has reiterated its commitment to supporting them, particularly those that are owned and run by women.

    The BoG has incorporated gender equality into the design and implementation of the financial and payments ecosystem framework, according to second deputy governor Elsie Addo Awadzi. She noted that the bank is acutely aware of the contribution that this sector makes to the economy and the significance of technology in facilitating its growth.

    Speaking at the Standard Chartered Digital Banking, Innovation and Fintech Festival 2022, Mrs. Awadzi enlisted the help of important stakeholders to raise awareness of the opportunities offered by technology for women-led businesses.

    “The BoG has implemented clear policies to regulate and support the growth of technology-enabled financial and payment ecosystems in furtherance of the financial inclusion and digitalisation agenda of government.

    The Bank has done this while mindful of the existing gender gap issues… We recognise that greater awareness is needed to effectively facilitate utilisation of the opportunities presented, and we count on greater collaboration from key stakeholders to create the necessary awareness,” she said.

    Her remarks come in the wake of a mixed bag of progress in the push toward gender parity in the application of digital financial solutions.

    For the third consecutive year, Ghana (37.2 percent) is ranked behind only Botswana (38.5 percent) and Uganda (38.4 percent) in the 2021 Mastercard Index of Women Entrepreneurs (MIWE) as nations with the highest proportion of women entrepreneurs globally.

    However, the expansion of women-owned businesses has been stifled – as in many cases they lack properly coordinated support, access to affordable long-term credit, and are confronted with insufficient access to new technologies.

    While stating that the BoG will continue to throw its weight behind bold initiatives such as the Standard Chartered Bank’s Women in Technology (WIT) Business Incubator Programme, the Second Deputy-Governor threw down the gauntlet before innovators – asking them to be intentional in providing solutions to enhance women-inclined businesses.

    “I challenge innovators to begin thinking-up solutions targetted at supporting women-led businesses. Our efforts at improving societal welfare by creating a more inclusive society will not be achieved if we fail to address the challenges of women with the potent tool of technology,” she stated.

    In a similar vein, the British High Commissioner to Ghana, Harriet Thompson, pledged her government’s continued support to accelerating Ghana’s digital agenda.

    “We are committed to further enhancing the already deep relationship between our two countries, and an important part of it is to do our bit to help make Ghana a leader in digitalisation in the region,” she said.

    Amid the push for more women’s participation in the digital financial space, she added, there is need for a long-term strategy that prioritises education in Science, Technology Engineering and Mathematics (STEM) for girls.

    “That is where it all starts; we need to lay the right foundation from that early age to make it possible for women to tap into the enormous opportunities which the adoption of technology offers,” High Commissioner Thompson stated.

    She added that gender parity in the world of work transcends fundamental human rights, as it the bedrock of a prosperous modern economy that provides sustainable growth – while calling for enhanced sensitisation “to ensure that even women in the most remote parts of the country are able to access technology and have a chance to implement it to enrich their businesses and contribute to economic development”.

    The Chairman of Standard Chartered’s Board of Directors, Dr. Emmanuel Kumah, in his remarks said the bank will remain at the forefront of supporting big and small businesses, especially the women-inclined ones, in the face of rapidly changing technological advancements.

    “Female entrepreneurs face many obstacles and structural inequities that prevent them from scaling their businesses… Standard Chartered will continue to chart the journey toward digitalisation and self-disruption in Africa, while making it a priority to harness technology and at the same time champion the next generation of entrepreneurs in Ghana and across the continent,” he added.

    As of the middle of 2022, 58 percent of entrepreneurs in Africa are women – and they contribute between US$250billion and US$300billion to the continent’s economy (13 percent) for its Gross Domestic Product, according to the World Economic Forum.

  • Cedi depreciation to reduce as BoG receives $790 million of cocoa syndicated loan

    Reports have indicated that the Bank of Ghana received the $790 million of the Cocoa Syndicated loan on October 29, 2022.

    According to a myjoyonline.com report, the cedi equivalent will be given to cocoa farmers for the purchase of cocoa beans.

    Ghana in recent times has had to rely on foreign currency to shore up its reserves in a bid to control the cedi’s depreciation.

    The cedi’s depreciation slowed down in the course of the week to sell at GH¢13.10 but has risen to GH¢13.85.

    However, the second tranche of about $340 million, which will be spread over three months will come in between November 2022 and February 2023. Interest to be paid on the facility is 1.75%.

    The Standard Chartered Bank, Coöperatieve Rabobank, Industrial and Commercial Bank of China (ICBC), MUFG Bank Ltd, Natixis, and Ghana International Bank plc were the Initial Mandated Lead Arrangers for the facility.

    The London branch of Bank of China Limited joined the facility as Senior Mandated Lead Arranger, while DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main and the Arab Bank for Economic Development in Africa (“BADEA”) joined as Mandated Lead Arrangers.

    Ecobank joined as Arranger. The OPEC Fund, United Bank for Africa PLC, Ahli United Bank B.S.C., and Federated Hermes Inc joined as Lead Managers, whilst AfrAsia Bank Limited, Citibank N.A, Absa Bank Ghana Limited, and GCB Bank Plc were joined as managers.

     

    Source: Ghanaweb

  • Cedi depreciation: Come and tell us your policies – Kennedy Agyapong to BoG

    Kennedy Agyapong, the member of parliament for Assin Central, has requested that the Bank of Ghana inform Ghanaians of its short- and long-term economic plans.

    He claims that the cause for the continuous devaluation of the cedi against the dollar is a lack of faith in the economy.

    He pointed out that the nation’s financial managers must effectively convey the efforts they are doing to revive the economy in order to foster that confidence.

    Speaking on Dowona TV on October 26, 2022, Kennedy Agyapong said “as a government, we have to do something to build the confidence of Ghanaians, we are pleading with the Governor to come out and tell us its monetary policies which are short-term policies. With what is going on, we need confidence from the government to say look take your time, this is how we are going to solve the problem, it will take a while but please don’t panic.”

    He further bemoaned the fact that the government does not seem to be communicating with Ghanaians on its steps to save the economy from the current economic hardships.

    The Assin Central MP noted that this is the time to be innovative and find new ways to do business.

    “Somebody has to speak to Ghanaians, but nobody seems to be talking. That is the biggest challenge that is making the cedi fall further. Situations like this are what bring about innovations and new ways of doing business and where we are today shows us that we have to be innovative and change our old styles,” he added.

    Ghana’s current economic crisis has been characterized by an increasing fall of the cedi against the dollar amid the high cost of goods and services.

    Business owners have lamented the constant depreciation of the cedi and its effects on their working capital.

  • Come and tell us your policies – Kennedy Agyapong to BOG

    Kennedy Agyapong, the member of parliament for Assin Central, has requested that the Bank of Ghana inform Ghanaians of its short- and long-term economic plans.

    He claims that the cause for the continuous devaluation of the cedi against the dollar is a lack of faith in the economy.

    He pointed out that the nation’s financial managers must effectively convey the efforts they are doing to revive the economy in order to foster that confidence.

    Speaking on Dowona TV on October 26, 2022, Kennedy Agyapong said “as a government, we have to do something to build the confidence of Ghanaians, we are pleading with the Governor to come out and tell us its monetary policies which are short-term policies. With what is going on, we need confidence from the government to say look take your time, this is how we are going to solve the problem, it will take a while but please don’t panic.”

    He further bemoaned the fact that the government does not seem to be communicating with Ghanaians on its steps to save the economy from the current economic hardships.

    The Assin Central MP noted that this is the time to be innovative and find new ways to do business.

    “Somebody has to speak to Ghanaians, but nobody seems to be talking. That is the biggest challenge that is making the cedi fall further. Situations like this are what bring about innovations and new ways of doing business and where we are today shows us that we have to be innovative and change our old styles,” he added.

    Ghana’s current economic crisis has been characterized by an increasing fall of the cedi against the dollar amid the high cost of goods and services.

    Business owners have lamented the constant depreciation of the cedi and its effects on their working capital.

  • Today in History: Your approach towards banking cleanup was wrong – Terkper replies Ofori-Atta

    Seth Terkper, a former finance minister, said that the government’s effort to clean up the banking industry wasn’t done in the greatest possible way.

    He pointed out that the ensuing employment losses had a negative impact on the expansion of the economy.

    In 2017 and 2019, the government invested a total of GH23billion in the cleanup of the banking sector.

    Former Finance Minister Seth Terkper has said the approach adopted by the Bank of Ghana and the Finance Ministry towards the banking clean-up exercise was wrong.

    He said the exercise could have been carried out without loss of jobs on the scale that was witnessed during the exercise.

    His comments come after Finance Minister Ken Ofori-Atta defended the approach that was adopted towards the clean-up exercise.

    Mr. Ofori-Atta told TV3’s Etornam Sey in an exclusive interview on Monday, October 26, 2020, that the financial sector is the heartbeat of every economy globally. A weak financial sector, he said, will have dire consequences for the economy and its people, a situation that demands that central authorities step in swiftly to address.

    Therefore, he said, the Government of Ghana will act quickly to address any challenges that may emerge in the sector again after the recent cleanup exercise.

    The Bank of Ghana with support from the Finance Ministry swept through the financial sector of the economy between the period 2017 and 2019.

    The central bank first started by revising the minimum paid-up capital for existing banks and new entrants from ¢120 million to ¢400 million.

    According to the regulator, this was to test the viability of the banks.

    The banks that were unable to meet this new requirement were either merged or collapsed.

    Following this action, some nine local banks, 23 savings & loans companies, 347 microfinance institutions, 39 finance houses, and 53 fund management companies closed down during the exercise.

    In total, the government spent GHSS23billion to undertake this exercise

    UniBank, The Sovereign Bank, The Beige Bank, Premium Bank, The Royal Bank, Heritage Bank, Construction Bank, UT Bank, Capital Bank all collapsed.

    Mr. Ofori-Atta said “Once you have the problem, you have to solve it because the financial architecture is the (basis) for any development.

    “So whether we like or not we had to do that. Now that we have done that we move ahead.”

    Asked whether if the situation presents itself the government will do it again in the same manner, he answered “You meet problems as a government that is what they elected you for and so you solve it.

    “And then you begin by commissioning this to give people the sense of hope for the future to say this thing can be done, and they have faith in you so lets us go with them.

    “If the engine is not functioning you can’t build on top of that so you had to solve the problem.

    “Is there a way you improve on what you are doing? Of course yes there is always a way to do that but fundamentally was the approach necessary, no question about that.”

    But Mr Seth Terkper, when asked whether he supports this approach while speaking in an interview with Etornam Sey on the New Day programme Wednesday, October 28 said “No.”

    He further explained that the government had the Energy Sector Levy left behind by the previous NDC administration, to use in strengthening the banks but did not.

  • BoG policy rate projected to increase by end of December 2022

    By the end of this year’s December, it’s expected that the Bank of Ghana will announce an increase in the Monetary Policy Rate.

    Prior to the scheduled and annual meeting of the central bank in November, Standard Bank, a South African institution, made this forecast.

    Standard Bank thinks that a rate increase will assist reduce the negative real return between inflation and interest rates, even though it will have an impact on the cost of borrowing.

    Inflation in the country was estimated by the Ghana Statistical Service to be 37.2% in October of this year, while interest rates were estimated to be around 33%.

    In addition, the Bank of Ghana in October this year hiked the Monetary Policy Rate by 250 basis points from 22 percent to 24.5 percent to contain soaring inflationary pressures.

    But Standard Bank in its September 2022 African Markets Revealed report said the BoG MPC will have to factor in elevated underlying inflationary pressures at its November meeting as well as second-round impacts of weaker cedi which has been experiencing persistent depreciation.

    “Still, the MPC sees a potential International Monetary Fund deal as beginning to address fiscal challenges, thereby helping to anchor inflation expectations. Furthermore, the MPC is still working with mining firms to find a structure to enable them to boost the FX (foreign exchange) reserves via direct FX sales from this large export-earning sector,” the report said.

    Touching on Ghana’s inflation outlook, the report outlined figures could ease from October to November this year but pointed out it could remain in double digits until at least August 2023.

    “However, should negotiations with the IMF prove protracted, foreign portfolio outflows may burgeon amidst a still volatile global risk environment, placing further upward pressure on US dollar/Ghana cedi, as well as keep inflation stickier than we currently anticipate,” the report added.

    Focusing on Ghana’s treasury yields, the report noted, “Nothing much implies that yields at the shorter end of the curve will ease over the next 4 months or so. Indeed, with headline inflation likely elevated for most of half year 2023, Treasury bill yields may prove sticky.”

  • We are taking steps to restore order in foreign exchange market – BoG Governor

    Bank of Ghana Governor, Dr. Ernest Addison, has expressed commitment to restoring order and bringing stability to the country’s foreign exchange market through stringent measures.

    According to him, despite disruptions in the general economy across the world, coupled with inflationary pressures, demand-supply imbalances, and uncertainties in the financial markets among others, the central bank is poised to collaborate with relevant stakeholders toward stabilizing the foreign exchange market.

    Speaking during a meeting on October 26 with stakeholders within the foreign exchange market, heads of banks and the Association of Forex Bureau Operators, Dr. Addison underscored the importance of sanitizing the market to address shortfalls and curtail the cedi’s decline.

    “Available data indicate that we started the year GH¢6 to the dollar. It got to GH¢7 and we stayed at GH¢7 in June, GH¢7.6 in July, GH¢8 in August, GH¢9.6 in September and now it is GH¢12.5. But we are here again with people sending messages that the dollar-cedi rate is GH¢15 to a dollar,” he noted.

    “Clearly, this type of movement does not reflect changes in the fundamentals. It is clear that the market is not functioning properly. We are seeing speculations taking over under very disorderly market conditions and it appears now the black market is rather driving exchange rates. This we cannot allow to continue,” the BoG Governor added.

    Touching on measures to reduce soaring inflation rates in Ghana, Dr. Addison said the central bank will continue to adopt tightening of monetary policy to prevent inflation from being entrenched.

    He however pointed out that monetary policies should be complemented with fiscal policies for every economy.

    Dr. Addison however admitted to recent developments in terms of liquidity in the banking sector but indicated that the Central Bank currently has some liquidity in place.

    “I am aware of the recent developments in terms of liquidity in the banking sector. As I said, I took note of the advice from Washington on the financial stability issue that there has to be targeted liquidity support to preserve financial stability without undermining the inflation control objectives. So, this is really the context we should have the discussion on all the complaints of we need liquidity and BoG not supplying liquidity,” the BoG Governor explained.

    “As we are all aware, we got the $750 million from the AfriExim Bank and I think on [October 26, 2022], we are supposed to receive the $790 million from the COCOBOD syndicated loan so the Central Bank has some liquidity.”

    “We have enough liquidity to keep things relatively stable till the International Monetary Fund Programme kicks in and the financing assurances expected from other partners come in,” he added.

    He continued, “I recently met the CEOs of banks and I have assured them that we will provide the necessary liquidity to ensure that we do not have a banking system with a liquidity problem and we have to do that within the context of keeping inflation low.”

    Debt sustainability concerns

    Meanwhile, the leadership of banks present during the engagements blamed the development on the rapid depreciation of the cedi against the US dollar on a wide range of issues.

    They prominently attributed the challenges to uncertainties surrounding the future of Ghanaian bonds especially.

    The heads of banks also said the ongoing negotiations between government and the International Monetary Fund (IMF) have fueled certain speculation over Ghana’s debt sustainability position and forced some banks to begin cutting losses and moving their investments into safe havens.

    To address the situation, they urged the Bank of Ghana to employ adequate mechanisms to regularise forex brokers in a way that would ensure their efficient supervision and prevent the sale of foreign currencies at exorbitant prices.

    The BoG Governor in his response assured stakeholders it was adopting measures to address challenges in the financial sector and particularly restore order in the forex market.

    “We are going to this by making sure the interbank market took full control of the forex market to enforce regulations surrounding forex trading so as to streamline the supply of forex in the country.”

    ’Black Market’ operations

    The Association of Forex Bureau Operators on their part lauded the Bank of Ghana for its resolve in clamping down on illegal forex dealers also known as ‘Black Market’ operators.

    They believe that ongoing efforts will help sanitise the sector and ensure only licensed forex operators can engage in exchange transactions.

  • BoG must stop printing money to finance government spending – Ato Forson

    Dr. Cassiel Ato Forson, a ranking member of the Support Committee of the House of Representatives, has advised the government against creating money to finance its spending.

    According to him, the government’s efforts to combat inflation are harmed by the practice, also known as monetary funding.

    He highlighted that the Bank of Ghana should prioritize the fight against inflation while delivering a public lecture titled “Building the Ghana we desire.”

    In his opinion, “The first objective should be to reduce inflation because Ghana does not want it to get entrenched. We must do this before it is too late.
    Inflation expectations need to be immediately anchored by the Bank of Ghana.
    To finance government spending, they ought to stop producing money, also referred to as “monetary financing.””

    Ato Forson charged the Bank of Ghana to institute an emergency monetary policy committee to consider hiking the monetary policy rate as a signal for investor confidence.

    “To stem the rapid depreciation of our cedi, the Bank of Ghana may have to call for an emergency monetary policy committee meeting and consider the need to hike the monetary policy rate, even if it is for purposes of signalling that somebody is in charge,” he said.

    “Government must prioritise and rationalise expenditure by cutting all unnecessary and frivolous expenditures, whiles considering the extension of support to the poor and the vulnerable in the country, “since the economic hardship is affecting them the most,” he added.

  • Forex Bureaus sell $1 at GH¢13.85 BoG GH¢13.01 as of October 28

    On the Interbank forex rates from the Bank of Ghana on, October 28, 2022, the Ghana Cedi is trading against the dollar at a buying price of 13.0028 and a selling price of 13.0158.

    As compared to yesterday’s trading of a buying price of 13.0018 and a selling price of 13.0148. At a forex bureau in Accra, the dollar is being bought at a rate of 13.15 and sold at a rate of 13.85.

    Against the Pound Sterling, the Cedi is trading at a buying price of 15.0481 and a selling price of 15.0658 as compared to yesterday’s trading at a buying price of 15.0847 and a selling price of 15.1024.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 15.00 and sold at a rate of 16.20.

    The Euro is trading at a buying price of 12.9848 and a selling price of 12.9978 as compared to yesterday’s trading at a buying price of 13.0853 and a selling price of 13.0983.

    At a forex bureau in Accra, Euro is being bought at a rate of 13.00 and sold at a rate of 13.70.

    The South African Rand is trading at a buying price of 0.7263 and a selling price of 0.7271 compared to yesterday’s trading at a buying price of 0.7247 and a selling price of 0.7254.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.65 and sold at a rate of 1.10.

    The Nigerian Naira is trading at a buying price of 33.9522 and a selling price of 33.9783 as compared to yesterday’s trading at a buying price of 33.9522 and a selling price of 33.9783.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 16.00 Naira for every 1 Cedi and sold at a rate of 20.00.

  • BoG revokes license of two popular forex bureaus in Accra

    The Bank of Ghana has revoked the license of the Airport City Forex Bureau within the Atlantic Tower building and Trade House Forex Bureau Ltd, a popular forex bureau at the Marina Mall.

    The closure follows the failure of the operators to issue receipts and the breaching of Foreign Exchange laws in the country.

    The two forex bureaus are under the same ownership and were detected by a mystery shopping exercise by the central bank.

    The Head of Other Financial Institutions Supervision department of the Central Bank, Yaw Sarpong, noted that they were not issuing electronic receipts and not requesting valid proof of identity.

    Mr. Sarpong said the “two bureaus on several occasions have been found not to be complying.”

    “The way they set their prices are detrimental and we think that the licenses of the two bureaus have to be revoked,” he added.

     

  • Disregard reports of restrictions on FEA and FCA holders – BoG to public

    New claims claiming that the government intends to impose limitations on people who have Foreign Exchange Accounts (FEA) and Foreign Currency Accounts have been denied by the Bank of Ghana (FCA).

    The banking sector regulator refuted the claims in a circular sent via Twitter on October 27 and asked the public to ignore the accusations.

    It also issued a warning against future reporting of this nature.

    “You should ignore this message spreading on social media.
    The Bank of Ghana issues a warning against such reporting since the message is misleading, according to a circular from the bank.

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  • Forex Bureaus sell $1 at GH¢14.60 BoG GH¢13.01 as of October 26

    On the Interbank forex rates from the Bank of Ghana on, October 26, 2022, the Ghana Cedi is trading against the dollar at a buying price of 13.0020 and a selling price of 13.0150.

    As compared to yesterday’s trading of a buying price of 12.5274 and a selling price of 12.5400. At a forex bureau in Accra, the dollar is being bought at a rate of 14.15 and sold at a rate of 14.60.

    Against the Pound Sterling, the Cedi is trading at a buying price of 14.6936 and a selling price of 14.7109 as compared to yesterday’s trading at a buying price of 14.1573 and a selling price of 14.1739.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 15.10 and sold at a rate of 16.20.

    The Euro is trading at a buying price of 12.8496 and a selling price of 12.8636 as compared to yesterday’s trading at a buying price of 12.3806 and a selling price of 12.3941.

    At a forex bureau in Accra, Euro is being bought at a rate of 13.30 and sold at a rate of 14.20.

    The South African Rand is trading at a buying price of 0.7056 and a selling price of 0.7062 compared to yesterday’s trading at a buying price of 0.6799 and a selling price of 0.6805.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.70 and sold at a rate of 1.10.

    The Nigerian Naira is trading at a buying price of 33.8625 and a selling price of 33.8802 as compared to yesterday’s trading at a buying price of 35.1452 and a selling price of 35.1636.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 17.00 Naira for every 1 Cedi and sold at a rate of 22.00.

  • 2022 GEF: Terkper raises concerns over BoG’s financing of deficit

    Seth Terkper, a former finance minister, has reopened the discussion on the Bank of Ghana continuing to finance the government, claiming that this will damage the bank’s financing position and be harmful to recovery efforts.

    His worries are related to the central bank supporting the government budget to the tune of GH22 billion as of the middle of the year.

    Since the Covid-19 pandemic’s appearance, the Bank of Ghana has abandoned its zero-financing policy in order to lend to the government and lessen the pandemic’s effects as well as the degradation of the nation’s public finances.

    This resulted in rating agencies downgrades, which in turn, contributed to a protracted lack of access to the Eurobond markets, led to a significant decline in external liquidity and access to the American greenback, thereby, having a significant impact on the local currency’s strength relative to the US dollar.

    Mr. Terkper, at the 11th Ghana Economic Forum, said the Bank of Ghana (BoG) has attempted to manage the issue in the short term by financing the budget deficit, but it needs some significant inflows because it has been hemorrhaging.

    “What BoG has tried to do, and this is what we have always done, is to manage the crisis in the short term, but they need some inflows because they’ve been haemorrhaging by financing the fiscal deficit. GH¢22 billion out of about GH¢37 billion deficit, that is two-thirds of the whole deficit is on BoG and this is a country that has come from a zero financing in 2016 to now be financing two-thirds of the deficit which was even as at mid-year,” he said.

    “The central bank is hugely financing government expenditure, but something has to be done about this in the short-term,” Mr. Terkper said.

    According to the BoG, the budget implementation, using banking sector data, for the first 9-months of the year recorded an elevated overall cash deficit of 6.4 percent of GDP, against the revised programmed target of 5 percent of GDP.

    Total receipts of GH¢51.49 billion (8.7 percent of GDP) over the review period, fell short of projected target of GH¢60.08 billion (10.2 percent of GDP) and represented 85.7 percent of the budgeted estimate.

    Total payments of GH¢89.04 billion (15 percent of GDP) was almost on target, representing 99.5 percent of GH¢89.46 billion (15.1 percent of GDP). The deficit of GH¢37.56 billion, together with net foreign loan repayments of GH¢3.54 billion, created a resource gap of GH¢41.1 billion, which was financed from domestic sources and the use of resources from the stabilisation fund.

    IMF projections

    Ghana’s fiscal deficit is expected to be 9.2 percent of GDP in 2022, according to the International Monetary Fund’s Fiscal Monitor Report from October 2022. It surpasses the government’s revised 6.6 percent estimate from the Mid-Year Budget Review.

    The Fund predicted that the deficit would be marginally smaller in 2023, 2024, and 2025, at 8.6 percent, 8.9 percent, and 8.7 percent, respectively. However, it will begin to rise in 2026 and 2027, reaching 9.7 percent and 9.6 percent, respectively.

    The primary deficit is anticipated to be 2.1 percent of GDP in 2022. On the other hand, it will decline to 1.1 percent of GDP in 2023 and even lower to 0.0 percent in 2024. This will show that the nation’s ability to raise revenue may be increasing.

  • Cedi depreciation a reflection of weak economic fundamentals – Economist

    According to economist Professor Godfred Bokpin, weak economic fundamentals are the cause of the cedi’s ongoing devaluation versus the US dollar.

    He contends that the performance of the cedi also reflects demand and supply mismatches, a lack of trust in the economy, and speculative activity.

    “Unfortunately, the cedi doesn’t misbehave by itself. It is a reflection of the fundamentals as well as supply and demand imbalances.
    Because the cedi is currently no longer a store of value, it is a reflection of lack of trust in the economy as well as some economic speculation, according to Prof. Bokpin, who was quoted by Citinewsroom.com.

    Touching on how the situation can be addressed, the Senior lecturer at the University of Ghana Business School called for urgent action to be taken to contain the persistent cycle of depreciation.

    “Some kind of active intervention that suggests that we are uncomfortable with the depreciation [is needed]. No one likes uncertainty. Everyone loves predictability. Price stability is at risk. Credibility around Bank of Ghana’s own short-term price stability objective is at risk. So, we need to restore these by bringing everyone on board.”

    “Government needs to build that consensus by looking at data from different angles. They need the buy-in of the opposition and organized labour across the country because implementing any programme affects everybody else, it will cause social unrest. Sometimes, the social adjustment costs are not evenly distributed and may affect those at the end of the income structure, so a good way to do this is to carry the whole nation along,” he explained.

    Meanwhile, the woes of the Ghana cedi in the first 10 months of this year continued as it has seen its value decline by over 50 percent to the US dollar.

    The situation, according to a recent Bloomberg tracking saw it ranked as the worst-performing currency in the world against the US dollar.

    This has forced many businesses to collapse, culminating in worker agitations, and discontent over government policies, among others.

  • Forex Bureaus sell $1 at GH¢15.50 BoG GH¢12.54 as of October 25

    On the Interbank forex rates from the Bank of Ghana on, October 25, 2022, the Ghana Cedi is trading against the dollar at a buying price of 12.5274 and a selling price of 12.5400.

    As compared to yesterday’s trading of a buying price of 12.5244 and a selling price of 12.5370. At a forex bureau in Accra, the dollar is being bought at a rate of 14.75 and sold at a rate of 15.50.

    Against the Pound Sterling, the Cedi is trading at a buying price of 14.1573 and a selling price of 14.1739 as compared to yesterday’s trading at a buying price of 14.0825 and a selling price of 14.1003.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 15.40 and sold at a rate of 16.30.

    The Euro is trading at a buying price of 12.3806 and a selling price of 12.3941 as compared to yesterday’s trading at a buying price of 12.3271 and a selling price of 12.3384.

    At a forex bureau in Accra, Euro is being bought at a rate of 13.60 and sold at a rate of 14.30.

    The South African Rand is trading at a buying price of 0.6799 and a selling price of 0.6805 compared to yesterday’s trading at a buying price of 0.6901 and a selling price of 0.6907.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.55 and sold at a rate of 0.85.

    The Nigerian Naira is trading at a buying price of 35.1452 and a selling price of 35.1636 as compared to yesterday’s trading at a buying price of 35.1353 and a selling price of 35.1744.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 18.00 Naira for every 1 Cedi and sold at a rate of 22.00.

     

    Source: Ghanaweb

  • Reassign Ofori-Atta and Adu Boahen if you can’t sack them – AFAG to Akufo-Addo

    The Alliance for Accountable Governance (AFAG) has called on President Akufo-Addo to reassign Finance Minister, Ken Ofori-Atta and Charles Adu Boahen, if he cannot sack them.

    According to the Alliance, the two ministers have failed to curb the continuous depreciation of the Cedi.

    In a press statement issued on Monday, they asked President Akufo-Addo to reassign the two immediately to salvage the situation.

    “The Minister of Finance and the Minister of State at the Ministry, Ken Ofori Atta and Charles Adu Boahen must be reassigned,” they demanded.

    Also, they have asked the President and the government to punish persons engaging in illegal forex trading.

    According to AFAG, these persons are also contributing to the free fall of the Cedi.

    “Some forex restrictions targeted at persons undermining the system need to be introduced, from the central bank through the commercial banks to the unlicensed forex operators,” excerpts of the statement demanded.

    Meanwhile, the Governor of the Bank of Ghana (BoG) will on Tuesday meet managers of banks and operators of forex bureaux to address the depreciation of the cedi.

    The meeting is also supposed to fix what the banks say is the overpricing of the dollar on the market.

    Source: Myjoyonline

  • A big chief like you should not speak like this in public – Obiri Boahene to Okyenhene

    A Former Deputy General Secretary of the New Patriotic Party, Nana Obiri Boahene, has berated the Okyenhene, Osagyefuo Amoatia Ofori Panin, for insulting persons who have been criticising President Akufo-Addo over happenings in the county.

    The Okyenhene said that persons who have been criticising the president over the current economic hardship are uncivilized villagers, witches, and wizards who have no sense of appreciation.

    “We must appreciate the feat of the President and show him appreciation for what he has done for Ghana. We must defend and protect him.

    “Those insulting the President are children of villagers. They are uncivilized. No well-nurtured person will insult an elderly. If you were raised in the Church, you will not insult an elder. If you are not a villager, then you may be a witch or wizard.

    “Not all will like you. Even Jesus Christ was crucified. It won’t bother me if they speak with sincerity but when you speak with hate, witchcraft, and envy, you must be careful because one day, one day! one day! one day! One day! The truth will overcome evil lies and envy,” the chief said.

    Reacting to this, Nana Obiri Boahene intimated that Osagyefuo Amoatia Ofori Panin’s comments were unfortunate.

    The former NPP deputy general secretary added that the chief, rather than insulting the critics of the president, should have urged Akufo-Addo to listen to those with genuine concerns.

    “Let me be very honest. Such a comment coming from a big chief is not in good taste. You are not some small chief, you are a big chief and you were not talking to your friend, you were talking in public and you uttered such words, it is not good.

    “You don’t have to support the NDC or the NPP to make such comments. It was an opportunity for him to urge the president to listen to the cries of Ghanaians. You don’t just call people witches and wizards. It is not good,” he said in Twi in a Neat FM interview monitored by GhanaWeb.

     

  • Micro-Credit sector’s total assets jump by 146.76%

    With total assets rising by 146.79 percent annually to GH 410 million as of the end of December 2021, the Micro-Credit sector made enormous gains in 2021 compared to 36.3 percent growth in 2020.

    The modest recovery in economic activity following COVID-19 and an increase in the number of members reporting were blamed for the increase in asset growth.

    Additionally, as of December 2021, gross loans and advances totaled GH 312 million.

    This amount represented a growth of 15.13 percent over the 8.3 percent recorded in 2020. The higher growth in gross and net loans and advances reflects the higher credit demand by Micro, Small, and Medium Enterprises.

    Again, shareholders’ funds continue to drive the funding of total assets with robust growth of 74.33percent to GH¢304.8million as at December 2021, relative to the 74.14.1 percent growth recorded in 2020 with total borrowings reduced by 16percent in December 2021, compared with 24percent growth in the previous year.

    The slowdown in borrowings was mostly due to the increase in loan repayments and profit ploughed back into the business, according to a report by the Micro-Credit Association of Ghana (MCAG).

    Giving highlights of the performance of the sector as captured by the report during MCAG’s 13th Annual General Meeting (AGM) in Accra on Thursday, October 20, 2022, the chairperson of the Association, Wilberforce Ofori, said the association’s accumulated funds stood at GH¢1.9million with actual revenues being GH¢1.2million as compared to the total budget revenue of GH¢1.4million at the end of 2021. The key revenue items were Subscriptions, Licence & Licence processing fees, Membership Registration fees, and Training fees.

    He said the total expenditure amounted to GH¢780,340.00 as compared to a budgeted expenditure of GH¢1.24million with the key expenditure items being Onsite Inspection and Supervision expenses. Personnel Emoluments, Governing Council Expenses, and General Administrative expenses.

    “The Association continues to be thrifty in the management of financial resources and I can confidently report that the target the Governing Board set in 2021 with regard to finance has been achieved,” Mr. Ofori told the AGM.

    He said the corporate governance structure of the Association has seen healthy improvement with the balance of skill and experience which is buttressed by a comprehensive framework, based on integrity, transparency and consensus building.

    “The quality of governance is a reflection of the diverse competencies and expertise of the members of the Association,” he stated leading to the remarkable financial being under year in review.

    In a speech delivered on his behalf, the Head of Other Financial Institutions Supervision Department of the Bank of Ghana, Yaw Sarpong said the central bank sees MCAG as a partner in the supervision of micro-credit institutions and it is thus required to ensure that micro-credit companies comply with the various laws and directives governing the operations of the sub-sector.

    “To ensure safe and sound institutions within the sub-sector, the Bank of Ghana in collaboration with MCAG has started onsite examination of individual money lenders. Similarly, the Bank of Ghana recently commenced the examination of MCAG and other umbrella bodies and authorised agents. This is done with the aim of strengthening supervision and adding value to the operations of the institutions,” he stated.

    As part of its support MCAG to enhance its operations and strengthen the micro-credit sub-sector, the Bank of Ghana extends quarterly support to the Association.

    “The financial support is to augment the finances of the Association to undertake monitoring and engagement of licensed institutions, facilitate the training of members, support members to put in place basic corporate governance structures, conduct market surveillance to identify unlicensed operators and support the efforts of the Bank of Ghana to strengthen stakeholder engagements through public education and awareness,” he stated.

    On his part, the Executive Director of the MCAG, Ebenezer Quartey, Esq. pledged that the Association will continuously train and build the capacity of its members because the industry is dynamic evolving very fast and there is a need to continuously improve to stay relevant.

    “The Association believes that effective Inspection Supervision are critical tools for assessing the health member institutions,” he stated.

     

  • Ghana’s debt restructuring to further weaken cedi – JP Morgan warns

    JP Morgan, a leading global investment bank and provider of financial services, has issued a warning that Ghana’s proposed debt restructuring initiative may worsen the position of the local currency.

    The US-based company claims that the trend may be significant even if Ghana’s central bank temporarily tightens or loosens its foreign exchange (FX) purchasing strategy in order to support the cedi.

    In a recent Emerging Market Quick Take article on the Ghana Cedi’s performance, JP Morgan ascribed the loss to the Bank of Ghana’s decision to buy dollars from mining and oil businesses, which unintentionally decreased the amount of foreign exchange available in the inter-bank market.

    The global investment bank further attributed the loss of confidence in the domestic economy, which it believes has drained FX reserves and resulted in volatility.

    “The cedi has now weakened by around 60% against the US dollar this year, as uncertainties about the need for, and extent of, debt restructuring increased. The drain of FX reserves year-to-date means the Bank of Ghana (BoG) now has limited firepower to smooth FX volatility.”

    It continued, “However, we believe the main trigger for the move to 14.875 (mid) in spot over recent days can be traced to BoG’s decision to purchase dollars from mining and oil companies, inadvertently reducing FX availability within the inter-bank market.”

    JP Morgan added that, “Although the current account deficit (CAD) is only moderately wider, the loss of confidence domestically has resulted in a significant drain from the financial account, even though portfolio outflows have been relatively limited.”

    “Based on our risk-reward scorecard, Ghana now looks attractive, but we expect concerns about the scope of debt restructuring to continue dominating, potentially leading to even more GHS weakness, even if an increase in FX forward auction sizes or reversal of the FX purchase policy results in short-term respite for the cedi”, it explained.

    Further touching on the Bank of Ghana’s decision to purchase dollars from mining firms, JP Morgan said the move has rather resulted in a squeeze and increased pressure in the FX market.

    At the present, the BoG has not increased the size of the fortnightly FX forward auctions and continues to issue at $25 million although demand has reached $100 million per auction.

    “To reduce volatility, we believe the BoG may need to use proceeds from mining sector FX purchases to increase interventions, or alternatively, reverse the FX purchase policy. Since the policy was implemented, the central bank reports that it had purchased around $84 million as at end-September [2022] and expects to have purchased $500 million by year-end,” JP Morgan advised.

  • Debt restructuring not suitable to check falling cedi caused by BoG – JP Morgan

    Global leader in financial services and US firm, JP Morgan is against a restructuring of Ghana’s debt.

    According to the US firm, such an initiative would further weaken the Ghana cedi, even when an increase in Foreign Exchange Forward Auction sizes or reversal of the foreign exchange (FX) purchase policy results in short-term respite for the cedi.

    JP Morgan further noted that the Bank of Ghana is responsible for the decrease in value of the local currency.

    It argued that the cedi has fallen because of the B central bank’s decision to purchase dollars from mining and oil companies, inadvertently reducing forex availability within the inter-bank market is one of the reasons behind the falling value of the cedi.

    It also said the loss of confidence domestically has resulted in a significant drain from the financial account, even though portfolio outflows have been relatively limited.

    “The cedi has now weakened by around 60% against the US dollar this year, as uncertainties about the need for, and extent of, debt restructuring increased. The drain of FX reserves year-to-date means the Bank of Ghana (BoG) now has limited firepower to smooth FX volatility. However, we believe the main trigger for the move to 14.875 (mid) in spot over recent days can be traced to BoG’s decision to purchase dollars from mining and oil companies, inadvertently reducing FX availability within the inter-bank market.”

    “Although the current account deficit (CAD) is only moderately wider, the loss of confidence domestically has resulted in a significant drain from the financial account, even though portfolio outflows have been relatively limited. Based on our risk-reward scorecard, Ghana now looks attractive, but we expect concerns about the scope of debt restructuring to continue dominating, potentially leading to even more GHS weakness, even if an increase in FX forward auction sizes or reversal of the FX purchase policy results in short-term respite for the cedi”, it added.

    Furthermore, it pointed out that the Bank of Ghana’s purchase of dollars from mining companies has resulted in a squeeze in the FX market, adding, while the new FX purchase policy is only a few months old, it has shifted FX away from the secondary market, thus resulting in increased FX pressure.

    In the meantime, the Central Bank has not increased the size of its fortnightly FX forward auctions, where it continues to sell $25 million, despite receiving demand amounting to $100 million per auction.

    “To reduce volatility, we believe the BoG may need to use proceeds from mining sector FX purchases to increase interventions, or alternatively, reverse the FX purchase policy. Since the policy was implemented, the central bank reports that it had purchased around $84 million as at end-September [2022] and expects to have purchased $500 million by year-end”.

    Change in FX policy to provide some relief in near-term

    Continuing, the US banking giant said the recent volatility of the cedi is mostly policy driven, but medium-term pressure to persist

    However, it stressed that a change in FX purchase policy could provide some near-term relief.

    It also said the FX reserves have been drained at a breath-taking pace, noting, “Gross international reserves have declined to $6.6 billion as at end-September, from $9.7 billion at the start of the year. However, net reserves have declined at a faster pace, reaching $2.7 billion in September [2022], from $6.1 billion in January’.

    At that pace, JP Morgan said gross reserves will have declined to $5.6 billion by the end of this year ($1.6 billion for net reserves), although disbursement of the $1.1 billionCocobod syndicated loan should provide a boost to FX reserves.

  • Cedi Rates: Forex Bureaus sell $1 at GH¢15.65 BoG GH¢12.53 as of October 24

    On the Interbank forex rates from the Bank of Ghana on, October 24, 2022, the Ghana Cedi is trading against the dollar at a buying price of 12.5244 and a selling price of 12.5370.

    As compared to Saturday’s trading of a buying price of 12.5823 and a selling price of 12.5949. At a forex bureau in Accra, the dollar is being bought at a rate of 15.05 and sold at a rate of 15.65.

    Against the Pound Sterling, the Cedi is trading at a buying price of 14.0825 and a selling price of 14.1003 as compared to Saturday’s trading at a buying price of 14.1740 and a selling price of 14.1907.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 15.50 and sold at a rate of 16.00.

    The Euro is trading at a buying price of 12.3271 and a selling price of 12.3384 as compared to Saturday’s trading at a buying price of 12.3424 and a selling price of 12.3558.

    At a forex bureau in Accra, Euro is being bought at a rate of 13.50 and sold at a rate of 14.30.

    The South African Rand is trading at a buying price of 0.6901 and a selling price of 0.6907 compared to Saturday’s trading at a buying price of 0.6891 and a selling price of 0.6898.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.

    The Nigerian Naira is trading at a buying price of 35.1353 and a selling price of 35.1744 as compared to Saturday’s trading at a buying price of 34.9499 and a selling price of 35.0269.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 18.00 Naira for every 1 Cedi and sold at a rate of 22.00.

  • IMF negotiations: Staff-level agreement to be reached by end of 2022 – Finance Ministry

    The Ministry of Finance says the Government of Ghana and the International Monetary Fund (IMF) have reached a clear path towards the final details of a programme with the goal of reaching a Staff-Level Agreement by the end of the year.

    This follows meetings between the Government and the IMF advancing negotiations towards a Fund-supported Programme in Washington (D.C) on the sidelines of the annual meetings of the World Bank and the International Monetary Fund.

    In an update to citizens, the Ministry stated that “a pathway towards fiscal sustainability has also been extensively discussed, and the Government of Ghana and the IMF remain fully committed to the goal of reaching a Staff-Level Agreement on a Programme within the shortest possible time.”

    IMF negotiations: Staff-level agreement to be reached by end of 2022 - Finance Ministry

    The Ministry indicated in pursuance of the Staff-Level Agreement, negotiations with the IMF will continue in Accra, as the IMF team is expected within the next few weeks.

    Meanwhile the Government of Ghana has expressed its gratitude to the IMF, the World Bank, bilateral partners and external investors for their continuous support even as the country goes through a tough time.

    IMF negotiations: Staff-level agreement to be reached by end of 2022 - Finance Ministry

    Furthermore, “the Ministry of Finance and the Bank of Ghana thank the people of Ghana for their forbearance in what is undoubtedly a troubling and challenging time for our economy, and economies globally. Government will continue to work with a fierce sense of urgency, to stabilize the economy and place it back on a firm trajectory of growth.”

    The Ministry has indicated it will continue to provide regular updates and further details on the country’s economic programme to the public immediately they become available.

    “These updates will be posted on the Ministry’s website, under a section titled IMF Programme Updates,” the statement said.

    DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.

    Source:myjoyonline.com

  • BoG must clamp down on cross border forex trading – MP

    Kennedy Osei Nyarko, the Member of Parliament (MP) for Akim Swedru in the Eastern Region, is pleading with business stakeholders, particularly the Bank of Ghana, to launch steps to clean up the Forex Bureau market.

    The legislator urged the Bank of Ghana to improve its productive partnership with law enforcement organizations in order to crack down on unlawful operators.

    There is the belief that actions by some operators have been contributing to speculation in the foreign exchange market, hence affecting the stability of the cedi.

    “BoG should keep their eyes on cross border Forex trading because it’s contributing to the high demands for the dollar. Whilst in Nigeria today one will need the equivalent of GH¢18.12p (716.82 Naira) to purchase $1.00 in Ghana the same Nigerian will just need the equivalent of GH¢13.00 (455 Naira).

    “Because of this most of them are taking advantage of our relaxed system and coming in to buy the FX here putting more pressure on the little dollar reserves we have. We need to immediately deal with this issue,” Hon Kennedy Osei Nyarko wrote on his official Twitter handle.

    “I strongly appeal to support the Bank of Ghana’s efforts to sanitise the forex bureau sector, by strictly enforcing existing rules for the fair and transparent conduct of business by licensed forex bureaus, and by clamping down on illegal forex operations (the so-called black market).”

    He called on stakeholders to enforce the laws in the forex market.

    “While the Bank of Ghana regulates the sector, it relies on criminal investigation and law enforcement agencies including COCLAB to help with enforcement efforts. I’m counting on cooperation especially now more than ever to help restore order and fair pricing to promote the Ghana cedi’s stability”

    He urged the Central Bank to investigate various complaints received regarding some forex bureaus that are not abiding by the laws governing foreign exchange.

    “The ‘black market’ has been contributing to the free fall of the local currency in recent times according to many Analyst,” he added

    Hon. Kennedy Osei Nyarko believes that effective collaboration with stakeholders can help deal with the challenge.

  • Cedi likely to hit GH¢25 to $1 by 2023 – US-based Economist

    Dr. Sa-ad Iddrisu, an economist and lecturer residing in the US, has asked the government to act quickly to solve the cedi devaluation since, if action is not taken, the cedi might reach GH25 to $1.

    During a zoom lecture with some Ghanaian students in the US on the condition of the Ghanaian currency on Wednesday, October 19, 2022, Dr. Iddrisu offered this recommendation.

    Dr. Iddrisu states, “On Monday, October 17, Bloomberg ranked the Ghanaian cedi as the worst-performing currency in the world.
    This year, it has lost more than 45% of its value.
    This has an impact on the nation’s enterprises and traders as well as on people’s savings.

    “In January 2022, if you had GH¢150,000 in savings at the bank, it was equivalent to $25,000 with the exchange rate of around Gh¢6. By October 2022, it’s now equivalent to $12,000 with the exchange rate of around GH¢12.5. Within the 9 months period, your savings would have lost its value by $13,000 (excluding current October inflation rate of 37.2%),” Dr. Iddrisu said.

    He added that “Things may even get worse by the end of the year into early next year. Analyzing exchange rates data from Bank of Ghana, there is the likelihood that the cedi may hit GH¢25 to $1 by early next year, if government does not take immediate steps to address the situation.

    Dr. Iddrisu added that, “the IMF loan facility of $3 billion over the next three years may help pump in some extra dollars into the economy and halt the drastic cedi depreciation. However, there is no certainty that the first tranche of the loan payment would come in anytime soon. Thus, government would have to think of immediate solutions to address the currency depreciation situation, whilst waiting on the IMF loans.”

    Dr. Iddrisu went further to suggest three immediate solutions the government can adopt to address the fall cedi, “For short term measures, the government should halt all profit repatriations by foreign companies in the country from now until July next year, secondly, halt businesses and academic institutions from charging in dollars, and finally regulate the “Hausa-Abokis” in the local markets who are engaged in currency exchange. These three short-term measures would help reduce the high demand for the dollar in the Ghanaian economy and help in stabilizing the cedi.”

    Dr. Sa-ad Iddrisu is a Ghanaian-born economist based in the United States of America. He has over the years been extremely vocal on the state of the Ghanaian economy and has made several policy recommendations in the past.

  • Interest rates and how they affect you

    What are interest rates?

     

    The rate of return usually in relation to loans, deposits and other financial investments is usually known as the interest rate. This rate of return is usually over a specified time period.

    In Ghana, it is unlawful for financial institutions to quote interest rates as daily or monthly. The Bank of Ghana requires that interest rates be quoted per annum.

    Interest rates are generally closely related to a concept known as the time value of money. This concept basically states that an amount of GH¢100 received today is worth more than the same GH¢100 to be received at some time later in the future. It closely follows the bird-in-hand argument and attaches more importance to current cash balance over future cash balance, all other things being equal.

    Most people can relate to the well-known phenomenon wherein prices of goods and services change over time. In Ghana, prices of goods have generally risen since start of the year. This phenomenon is known as inflation. The opposite of inflation is deflation – a situation where prices of goods and services generally fall over time. Inflation weakens the purchasing power of your hard-earned cash, and thus it is important to take steps to preserve the purchasing power of your cash.

    One way of protecting the purchasing power of cash is via interest rates. To compensate investors for the loss of purchasing power due to inflation, banks and financial institutions usually pay some compensation to investors. This compensation comes in the form of interest rates and is meant to cushion investors. Usually, this interest rate is higher than the inflation rate. The real return on one’s investment is thus the excess of the interest rate above the inflation rate.

    The financial markets provide a platform for people who have excess funds to channel these resources to other people who need those funds. Generally, those with excess funds (lenders) prefer to lend for a shorter period, while those with deficits (borrowers) prefer to borrow for a longer period. If you have a bank account, you surely have at some point been a borrower or a lender.

    Generally, if you apply for a loan and are able to adequately demonstrate your ability to repay, you benefit from lower credit risk premiums. Credit risk is the risk that you may default and thus not be able to pay back the amount you have borrowed or its interest. Based on the size of the transaction, you may be able to obtain some preferential treatment from the bank. This is called volume premium. A tenor premium relates to how much more or less you are charged on a loan depending on how long you want the cash for. Generally, tenor premiums increase as the tenor of the loan increases.

    The rate charged by a bank on your loan may either be fixed rate or floating rate. As the names suggest, these rates may either remain unchanged or be changed regularly over the life of the loan. In a rising interest rate environment, it is always advisable to borrow at fixed rates since that will be less expensive compared to borrowing at floating rates.

    In Ghana, regulators of the financial markets include the Bank of Ghana, the Securities and Exchange Commission, the Ghana Stock Exchange, the National Insurance Commission, and the National Pensions Regulatory Authority. It is thus crucial to engage in any form of business transactions only with entities that are licenced by their respective regulators.

    Transacting with a regulated entity such as First National Bank, for example, affords you the opportunity to seek redress should you feel unfairly treated. A loan-shark on the other hand may not be subject to the scrutiny of regulators, and thus could treat you unfavourably.

    There are two concepts that one needs to consider when looking at interest rates. First is the Monetary Policy Rate (simply referred to as the policy rate), which is the benchmark rate at which banks can borrow money from the Bank of Ghana. The current policy rate is 24.50 percent. The policy rate influences the Ghana Reference Rate (GRR), which serves as a reference for the interest rate that banks charge their customers on credit products such as home loans. The current GRR rate is 27.44 percent and is adjusted monthly. The interest rate on an investment is often referred to as the yield on that investment.

    Generally, if you apply for a loan from a bank such as First National Bank, the bank will conduct an assessment of your ability to service the loan. Based on your perceived creditworthiness among other factors, the bank may decide to approve or decline your loan application. If you are successful with your loan application, the bank charges an applicable lending rate based on your risk profile, the amount involved, available liquidity and other factors.

    The lending rate charged by the bank includes the reference rate (GRR) and a risk premium. The GRR is positively correlated to the monetary policy rate (MPR), so that one would expect the lending rate to go up when the policy rate goes up and vice versa.

    Why are interest rates rising?

    At the beginning of year 2022, the policy rate was at 14.5 percent while the 91-day Treasury bill rate was 12.5 percent. Currently, the policy rate is at 24.5 percent while the 91-day rate is 30.96 percent. Yields on the 182-day and 364-day T-bills have also risen, from 13.2 percent and 16.6 percent as at end of 2021 to 31.9 percent and 31.5 percent respectively.

    The Monetary Policy Committee (MPC) of the Bank of Ghana meets about six times a year and uses interest rates to manage inflation. Inflation is simply how much a weighted basket of goods and services – such as groceries and petrol – goes up from one period to another, usually a year. The changes are expressed in percentages, and since the Bank of Ghana’s inflation target is between 6 percent and 10 percent, the central bank seeks to ensure price stability by keeping inflation in this target band.

    According to data from Ghana Statistical Services, Ghana’s consumer inflation rate is currently at 37.2 percent. The high inflation is due to several issues, mainly supply chain disruptions as a result of the Russian-Ukraine war which drove prices of crude oil and agriculture commodities upward; the cedi-depreciation against major trading currencies; and upward adjustments in the prices of utilities.

    This means that it now costs more to transport goods and produce necessities such as food. Inflation thus reduces the purchasing power of your money.

    Global developments – both economic and political – have also caused consumer inflation to go up, resulting in efforts by the various central banks to contain rising prices via increases in their policy rates. The Bank of England, US Federal Reserve as well as the South African Reserve Bank have all hiked rates on the back of inflationary concerns.

    As a consumer, what does this mean for you?

    If you have a floating rate credit facility – whether it’s secured or unsecured – and the interest rate goes up, your monthly repayment will go up as well. You will pay more for every new loan you apply for when interest rates rise. For example, a GH¢100,000 loan will cost about GH¢2,500 more per annum now that the reference interest rate has gone up by 2.5 percent. This will unfortunately limit your spending as goods costs more.

    Below are some quick tips to manage the strain of rising interest rates on your pocket:

    1. Keep track of what you spend. See where your money goes and if there are ways to cut back on some of the spending you don’t have to do. For instance, you could spend less on take-awaysand treats, and put that money toward your mortgage repayment or other credit.
    2. Move your credit debit order as close as possible to the date you get your income. This way you’ll know that your debit order has been paid and won’t have to worry about keeping money aside for the rest of the month.
    3. Food prices have gone up in the last few months, so look for ways to save money on food – like buying non-perishables once a month and creating a weekly menu from the pantry, then only buying a few fresh things every week.

    The good thing about the interest rate cycle is that if you have savings such as emergency savings or you live off the interest from cash investments, the interest on those savings should also go up. This means that more interest will be earned, so more interest will be paid every month.

    If you do free-up cash via the tips above or alternatively obtain the increase on interest paid on cash investments, think about using that to pay off any expensive credit that you may have or saving it for an emergency, or putting it toward your longer-term goals such as retirement savings. Save and invest with First National Bank with as little as GH¢100 and earn cool interest.

    >>the writer is Head, Global Markets at First National Bank Ghana

  • FLASHBACK: The fight between the cedi and the dollar

    The battle between the dollar and the cedi has gone on indefinitely because the dollar keeps rising while the cedi falls.

    The cedi has currently lost more than 50% of its value against the dollar. GhanaWeb examines the path of the cedi from January to August in this article.

    Many Ghanaians will attest to the fact that 2022 has not exactly been a good year, particularly when it comes to the performance of Ghana’s economy.

    All the macroeconomic indicators seem to be pointing in the wrong direction, with inflation rising to unprecedented levels (currently hovering above 30 percent). As a result, the prices of food, transport, and oil products have particularly become issues of grave concern to many Ghanaians.

    The concern is why prices are increasing at unprecedented levels in Ghana. One major reason is the depreciation of the country’s currency, the Ghana Cedi. 2022 has not been a good year for the cedi, with the currency currently losing about 40 percent of its value and being ranked as the second worst performing currency among 150 currencies in the world, according to Bloomberg.

    But how did we get to this point? GhanaWeb takes a look the performance of the cedi against one major foreign exchange, the US Dollar (dollar).

    Cedi to dollar rate in January 2022

    According to data from the Bank of Ghana (BoG), the cedi/dollar rate was GH¢5.9 at the beginning of January 2022. But it depreciated to GH¢6.02 at the inter-bank level, indicating a depreciation of nearly 12 percent.

    Cedi to dollar rate in February 2022

    As of the end of February 2022, the cedi had once again depreciated against the dollar by about 10 percent, from the GH¢6.02 rate at the end of January 2022 to GH¢6.6, as per data from the BoG.

    Cedi to dollar rate in March 2022

    For March 2022, the cedi once again depreciated significantly to the dollar from GH¢6.6 to GH¢7.1, showing a month-on-month depreciation of approximately 8 percent.

    Cedi to dollar rate in April 2022

    At the end of April 2022, the cedi depreciated by less than 1 percent month-on-month, from GH¢7.1122 to GH¢7.1128.

    Cedi to dollar rate in May 2022

    The cedi to dollar rate at the end of May 2022 was GH¢7.14, which again signifies a less than 1 percent drop from the GH¢7.11 cedi dollar rate recorded at the end of April 2022.

    Cedi to dollar rate in June 2022

    For June 2022, the cedi depreciated to GH¢7.23 per dollar, which showed a depreciating rate of 1.3 percent compared to the GH¢7.14 exchange rate for May 2022.

    Cedi to dollar rate in July 2022

    The value of the cedi reduced to GH¢7.61 by the end of July from the GH¢7.23 per dollar it started with for the month. This showed an approximate percentage depreciation of 5 percent.

    Cedi to dollar rate in July 2022

    On the Interbank forex rates from the BoG on Friday, August 19, 2022, the cedi is trading against the dollar at 8.1031. This shows a month-on-month depreciation rate of about 6.6 percent from the previous month.

    Per the figures of the BoG, the cedi-dollar rate was 5.9 at the beginning of 2022; now, it is 8.1. This shows that from January 2022 to today, August 19, 2022, the Ghana Cedi’s value has fallen by approximately 40 percent.

    From the figures above, it is clear which currency is winning the cedi and dollar ‘fight’.

  • Forex Bureaus sell a dollar at GH¢14.30 as of October 21

    On the Interbank forex rates from the Bank of Ghana on, October 21, 2022, the Ghana Cedi is trading against the dollar at a buying price of 12.5823 and a selling price of 12.5949.

    As compared to yesterday’s trading of a buying price of 11.3076 and a selling price of 11.3190. At a forex bureau in Accra, the dollar is being bought at a rate of 14.00 and sold at a rate of 14.30.

    Against the Pound Sterling, the Cedi is trading at a buying price of 14.1740 and a selling price of 14.1907 as compared to yesterday’s trading at a buying price of 12.7041 and a selling price of 12.7180.

    At a forex bureau in Accra, the pound sterling is being bought at a rate of 14.90 and sold at a rate of 15.30.

    The Euro is trading at a buying price of 12.3424 and a selling price of 12.3558 as compared to yesterday’s trading at a buying price of 11.0625 and a selling price of 11.0736.

    At a forex bureau in Accra, Euro is being bought at a rate of 12.90 and sold at a rate of 13.20.

    The South African Rand is trading at a buying price of 0.6891 and a selling price of 0.6898 compared to yesterday’s trading at a buying price of 0.6193 and a selling price of 0.6197.

    At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.

    The Nigerian Naira is trading at a buying price of 34.9499 and a selling price of 35.0269 as compared to yesterday’s trading at a buying price of 40.5017 and a selling price of 40.5670.

    At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 14.00 Naira for every 1 Cedi and sold at a rate of 16.50.

  • FLASHBACK: BoG Governor ‘pressured’ Agongo’s bank to merge with UMB before ‘killing’ it – Adongo

    The Member of Parliament for Bolgatanga Central, Isaac Adongo, accused the Bank of Ghana of double standards over the revocation of Heritage Bank’s license during the financial sector clean-up exercise.

    At a presentation at Takoradi Technical University on Thursday, 17 October 2019, Adongo said: “Three weeks before the revocation of the license of Heritage Bank, the Bank of Ghana Governor invited the MD of Heritage of Bank, the Board Chairman of Heritage Bank, our own venerable Prof Kwesi Botchwey and the 70 percent shareholder of the bank, Seidu Agongo, to a meeting at the conference room of the Bank of Ghana.”

    “In that meeting, Dr. Addison recommended that Heritage Bank should merge with UMB,” he added.

     

    The MP for Bolgatanga Central, Mr Isaac Adongo has accused the Bank of Ghana Governor, Dr. Ernest Addison of double standards as far as the revocation of the license of Heritage Bank is concerned.

    According to the opposition lawmaker, Dr. Addison tried forcing Heritage Bank to merge with UMB three weeks prior to the revocation of the license of Agongo’s bank on grounds that he was being prosecuted in a criminal case, thus, failing the fit-and-proper test.

    At a presentation at Takoradi Technical University on Thursday, 17 October 2019, Adongo said: “Three weeks before the revocation of the license of Heritage Bank, the Bank of Ghana Governor invited the MD of Heritage of Bank, the Board Chairman of Heritage Bank, our own venerable Prof Kwesi Botchwey and the 70 percent shareholder of the bank, Seidu Agongo, to a meeting at the conference room of the Bank of Ghana”.

    “In that meeting, Dr. Addison recommended that Heritage Bank should merge with UMB”.

    The MP said that the meeting took place in mid-December 2018 at which the Governor “pressured” Heritage Bank to kowtow to the merger with UMB. B

    “But after due diligence conducted by KPMG, Heritage Bank noticed that UMB was in a difficult position to become a merger partner. As a result, the Board of Heritage Bank declined the offer by the Bank of Ghana.

    “Days later, the Bank of Ghana revoked the license of Heritage Bank Limited, the bank they were pressurizing to merge and willing to supervise a merger between it and UMB”, Mr Adongo said.

    He, thus, wondered: “So, at the time that the Governor invited Seidu Agongo for merger talks with UMB, didn’t he know he was in court? If the Heritage Bank-UMB merger had materialized, it meant the Governor would have had no problem with that even though Seidu Agongo was still the 70 percent shareholder of Heritage Bank and was still being prosecuted?”

    “So, all the reasons are equivalent to announcing the death of a man who has been killed by witches and finding a name for the sickness”, he noted.

    The BoG revoked Heritage Bank’s license on Friday, 4 January 2019 on the basis that the majority shareholder, Mr Agongo, among other things, used proceeds realised from alleged fraudulent contracts he executed for the Ghana Cocoa Board (COCOBOD), for which he and former COCOBOD CEO, Dr Stephen Opuni are being tried, to set up the bank.

    Announcing the withdrawal of the license, the Governor of the central bank, Dr Ernest Addison told journalists – when asked if he did not deem the action as premature, since the COCOBOD case was still in court – that: “The issue of Heritage Bank, I wanted to get into the law with you, I don’t know if I should, but we don’t need the court’s decision to take the decisions that we have taken. We have to be sure of the sources of capital to license a bank; if we have any doubt, if we feel that it’s suspicious, just on the basis of that, we find that that is not acceptable as capital. We don’t need the court to decide for us whether anybody is ‘fit and proper’, just being involved in a case that involves a criminal procedure makes you not fit and proper”.

    However, Mr Agongo responded with a press statement in which he said that the “not fit and proper” tag stamped on him by the central bank was “capricious, arrogant, malicious and in bad faith”.

    According to Mr Agongo, “In purportedly making the determination, the central bank obviously had little regard for the time-honored principle that a person is presumed innocent until proven guilty by a court of competent jurisdiction”, adding that: “The fact that I have a case pending before the High Court is a matter of public knowledge but my guilt or innocence is yet to be determined by the Honourable Court.”

    “The determination that I am not a fit and proper person to be a significant shareholder of HBL because the central bank suspects the funds are derived from illicit or suspicious contracts with Cocobod is not only calculated to pre-judge the outcome of the criminal proceedings but also violative of the principle of presumption of innocence to which every individual is entitled. Since when has suspicion become a substitute for credible evidence?” Mr Agongo asked.

    Also, the erstwhile Prof Botchwey Board issued a statement on the matter in which it said: “Heritage Bank was by the Bank of Ghana’s own admission, a solvent bank. It NEVER received liquidity support from the Bank of Ghana. Its corporate governance record had never been impugned by the Bank of Ghana. We believe we have been done a grave injustice and a terrible precedent set that does not bode well for the future.”

    Source: Ghanaweb

  • FX committee did its best but cedi worthless against dollar – Franklin Cudjoe

    President of Imani Africa, Franklin Cudjoe, has said the FX Committee set up by government to help tackle the depreciation of the Cedi did its best to advise government on the local currency notwithstanding, the Cedi has become the most worthless against the US Dollar.

    In a social media post, Mr Cudjoe noted that the FX Committee tried to prevent the Cedi from becoming the most worthless against the US Dollar, adding that the government should have just dealt with the problem of the Cedi depreciation rather than set up a committee on it.

    “The Ghanaian currency, the Cedi is officially the most worthless against the $. My Cedi Committee did its best to advice against this eventually. Alas, when you see a snake, just kill it. No need setting up a Committee on snakes,” Mr Cudjoe revealed.

    Government in 2020 set up an FX Committee made to advise it on how to stem the depreciation of the Cedi, particularly against the US Dollar.

    The establishment of the committee, named the FX Developments Committee, is in fulfilment of a promise made by the ministry to constitute a bi-partisan committee to look into the problem and help address it.

    Inaugurating the committee, Deputy Finance Minister, Charles Adu Boahen said the committee will work to complement the efforts of the Bank of Ghana in curtailing the usual poor performance of the cedi against other major foreign currencies.

    “The formation of this committee is not to infringe on the independence of the central bank in its foreign exchange operations,” he said.

    The admission of failure by Franklin Cudjoe, who controversially accepted to be a member of the Committee, puts paid to claims that the committee has not had any impact on the value of the Cedi.

    Source: Ghanaweb

  • High inflation, Cedi fall only temporary – BoG

    Amid high inflation and a fast-depreciating local currency which have caused turmoil in the economy this year, Second Deputy-Governor of the Bank of Ghana (BoG) Mrs. Elsie Addo Awadzi has assured that the situation is temporary, as her outfit together with the finance ministry are working hard to keep it under control with the proposed programme with the International Monetary Fund (IMF).

    Data from Ghana Statistical Services (GSS) show that inflation for September hit 37.2 percent, the highest recorded in more than 21 years (since June 2021); and the cedi is currently trading around GH¢12 to US$1 – indicating a 50 percent depreciation since beginning of the year.

    Scary as these figures are, though, the Second Deputy-Governor says she is confident about the economy’s outlook, given the plans both BoG and the Ministry of Finance have tabled before the IMF for a programme to transform the economy – adding that all must avoid speculative behaviour which tends to aggravate the situation.

    “Recent global developments have heightened economic and business uncertainties for businesses and individuals. Our domestic economy is not spared from these developments. The Bank of Ghana is working closely with the Ministry of Finance and other key stakeholders to negotiate a sound economic reform programme supported by the IMF, to stabilise and transform our economy.

    “We at the Bank of Ghana are confident about the outlook for our economy. The current high inflation and cedi depreciation are temporary, and we must avoid speculative behaviour that only works against attaining stability sooner,” she said at the 21st annual RCB CEOs Conference held in the Volta Region.

    RCBs must brace up for digitalisation

    Speaking on the theme ‘Positioning Rural Banking at the Centre of Financial Services Delivery in Ghana – The Role of Stakeholders’, Mrs. Awadzi urged the Rural and Community Banking (RCB) sector to embrace digitalisation, as that is the direction the financial sector is going; hence, failure to follow suit will lead to disastrous consequences for industry players.

    “It is also important to situate the RCB sector’s strengths within the rapid changes taking place in the financial services industry all around the world and here in Ghana. For a start, technology is fast disrupting traditional business models for delivering finance all around the world, and is redefining financial services as we knew them.

    “Digital financial services are now the future, and are creating opportunities to reach existing customers and the previously unbanked in cost-effective ways. This also means that universal banks are now able to reach communities and people with their services much easier and cheaper than they previously could, thereby competing with the RCB sector on your own turf.

    “At this rate, any financial institution that has not already adopted and implemented a digital transformation strategy is already behind the curve. The RCB sector therefore cannot afford to wait much longer before it begins to leverage emerging technologies to modernise their business models to meet the fast-changing needs of their customers and remain relevant to the segment of the economy that was traditionally served by the sector,” she said.

    She further cautioned them on the heightened concerns about cybersecurity – one of the disadvantages of going digital; saying RCBs must invest in good infrastructure to take care of this associated risk.

    “Digitalisation comes with its own complexities and risks – including cyber security risks, third and fourth party/outsourcing risk, data privacy breaches, technology failure risk, increased AML/CFT risks, and consumer protection risk among others. Needless to say, a lot is required by way of strong governance and risk management systems to help mitigate these risks as financial institutions seek to exploit the benefits of digitalisation.

    “RCBs will therefore need to augment their capital base as needed in order to deploy more sophisticated systems and structures in line with the Bank of Ghana’s 2018 Cyber and Information Security Directive. The Directive provides for the adoption of minimum technical, governance, data protection protocols; and transaction monitoring and fraud detection and mitigation tools to help mitigate key risks from digitisation,” Mrs. Awadzi said.

    Source:Ghanaweb