BoG Offers $100m In Foreign Exchange Auction

The Bank of Ghana (BoG) is offering $100 million to dealers in a Foreign Exchange Forward Auction limited to the 30-day tenor.

This is part of moves to boost the supply of the dollar to the foreign exchange (FX) market and ease the depreciation of the cedi to the dollar further.

In addition to the guidelines for Bulk Oil Distributing Companies (BDCs) FX auctions, the Central Bank said all authorised foreign exchange dealer banks shall also comply with the provisions of the code of conduct for the interbank foreign exchange market in Ghana.

The Bank of Ghana also directed banks to ensure that participation in the auction is limited to qualifying BDCs based on conditions such as evidence of a valid licence to operate as issued by the National Petroleum Authority (NPA) as well as they being in good standing.

The BDCs must also provide evidence of a contract indicating volumes and cost of the products including premiums or discounts applied, as well as payment due date as well as their contracts being valid for the current window between April 1st and April 15th, 2022.

Furthermore, they must ensure evidence of sales to oil marketing companies within the last three months.

BDCs are also expected to deposit all sales proceeds into an escrow account with their bidding banks for the window in which they participate in an auction. This will be closely monitored.

Banks are also required to pass on FX won by BDCs at the winning bid rates with no spreads.

The BoG noted that it reserves the sole right to auction allocation.

Meanwhile, authorised dealers are being invited to submit their bids.