Explainer: Why the dollar costs more at the counter than BoG’s rate

You check the Bank of Ghana(BoG) website and breathe a sigh of relief, the dollar rate looks manageable.

You smile, thinking your cedis might just stretch a little further this time. But the moment you step into the nearest forex bureau or bank, reality hits like a slap.

Boom, the rate is way higher than what you saw online.

Welcome to Ghana’s real-life foreign exchange marketplace, where the Bank of Ghana’s official figures are just the tip of the iceberg.

In this report, we unpack why the rate you see isn’t the rate you get, and how supply, demand, profit margins, and risk all come together to create the real price you pay for dollars, pounds, and euros.

So between BoG’s and the forex bureaus exchange rate market, who’s playing who?

Turns out, no one is playing you; it’s just how the foreign exchange market works.

The difference between the BoG’s official rates and what you actually pay boils down to basic market forces, trading volumes, and how banks and forex bureaus operate.

Let’s break it down.

Last week, the Bank of Ghana’s official rates were GH₵10.28 to the dollar, GH₵13.86 to the pound, and GH₵11.67 to the euro.

Sounds great, until you actually try to buy some.

On the ground, forex traders were selling the dollar at around GH₵10.80, the pound at GH₵14.60, and the euro at GH₵11.90.

Why the gap?

Think of foreign exchange like tomatoes in Makola. Prices differ depending on the seller, the time of day, and how many people are buying.

Forex works the same. Banks and forex bureaus buy and sell foreign currencies like any other commodity, using demand and supply to set prices.

The Bank of Ghana supplies foreign currency in bulk to commercial banks, usually at better rates because of the large volumes involved.

Banks, in turn, add their margin (a bit like a shop’s profit) before selling to the public. Forex bureaus, dealing in smaller amounts and facing higher risks, add an even bigger margin.

There isn’t one “real” rate. BoG calculates what’s called a spot weighted median rate basically an average of interbank transactions and publishes it daily.

But it’s only a benchmark. The rates you get at banks or forex bureaus include markups that cover operational costs and profit margins. Some add as much as 7%.

Ghana uses the direct quote system.

This means the exchange rate tells you how many cedis you need to buy one unit of foreign currency, say, USD 1 = GH¢ 12.20 (buy), GH¢ 12.50 (sell).

Banks buy low and sell high like a ‘bend-down’ boutique in the local fashion trend.

The lower rate is for exporters bringing in foreign currency, and the higher rate is what importers and ordinary customers pay to buy dollars, pounds, or euros.

On top of that, there’s the interbank market where banks trade currencies with each other.

These rates change by the minute depending on how badly one bank needs foreign exchange.

These movements affect what eventually ends up at the retail counter.

The rate on the BoG’s website? That’s just the starting point, not the final price.

What you pay at the counter reflects market demand, volume, urgency, and the seller’s margin.

So next time you wonder why the dollar is “more expensive” than what the BoG says, just remember forex, like waakye, depends on who’s serving and how hungry the crowd is.