Forex Forward Sale: Bank of Ghana increases sales by 60%, here’s why

January 14, 2020 5:51 PM

The Bank of Ghana (BoG) has raised the monthly sale of foreign currencies (FX) by 60 percent in the first quarter of this year.

Dr Ernest Addison, Bank of Ghana Governor

This, according to the bank, is aimed at helping contain the increased demand for those currencies within that period of the year.

The central bank is hopeful that the front-loading of the auctions in between January and March this year will help narrow the gap between peak demand and supply of FX and reduce the pressure that volatile demand poses to the cedi in the first quarter.

The decision to increase the amount to be auctioned was also in response to “significantly higher” demand for the FX than previously anticipated.

The Head of Financial Markets at BoG, Mr Steven Opata, said following the move.

“Based on the forward auction performance in 2019, it was observed that demand was significantly higher than the published auction target on each auction,” he said.

Adding that “The bank, as such, decided to increase the auction target from $50 million monthly to $80 million in the first quarter in line with observed seasonal demand.”