Bank of Ghana to auction US$715m in 2020

The Bank of Ghana (BoG) will auction US$715 million in Forward Foreign Exchange Auctions in the whole of 2020.

Dollars

This will be done in accordance with the Foreign Exchange Forward Auction guidelines issued on September 23, 2019.

According to the Central bank, the bids will be invited per the prescribed format to purchase/sell the US dollar against Ghana cedi separately on each auction date.

It is expected that the months with the highest auctions of US$80 million each are January, February and March 2020.

The BoG explained that the decision to auction such amount of US dollars is to help arrest, to some extent, the constant depreciation of the cedi against the dollar.

Per the recent trends, the cedi is expected to depreciate by about 13% to the US dollar in 2019.

To help address this challenge, the BoG started a Foreign Exchange Forward Rate Auction limited to 7-day, 15-day, 30-day, 45-day, 60-day and 75-day tenors in October 2019.

In addition to the auction guidelines, all authorised Foreign Exchange Dealer Banks were to comply with the provisions of the Code of Conduct for the Interbank Foreign Exchange market in Ghana.

Since the introduction of Foreign Exchange Forward Rate Auction, it has been recording a significant oversubscription.

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