Bank of Ghana has handed US dollar to black market – IMANI Ghana

Policy think tank, IMANI Ghana, has criticised  new forex rules by the Bank of Ghana (BOG ) , aimed at shoring up the cedi against major international currencies.

According to IMANI, the BOG’s new rules, one of which prohibits over-the-counter cash withdrawals of more than US$10,000, will help boost a foreign exchange black market and cause the cost of doing business to shoot up.

“…they just handed the US Dollar to the black market and almost quadrupled the costs of all businesses in the country in the short to medium term with effects that would last longer than the anticipated benefits”, IMANI President, Mr Franklin Cudjoe told Thursday .

This, he explained, is because Ghana’s economy is “largely an import-led one with a greater percentage of manufacturing resources imported”. 

Mr Cudjoe said the new forex rules will hurt business owners such as spare-part dealers who rely heavily on dollars for importation.

He also suggested that smuggling of cocoa out of the country will increase on account of the new forex rules.

“Payment for cocoa farmers will be affected, meaning the value of what they receive will be diminished. Some might just sell to Ivory Coast,” he said.

The IMANI President called on the government to learn from the experiences of other countries which have had to deal with currency depreciation of their own in recent times.

“Zimbabwe may be a farfetched example, but to deal with their almost worthless zim currency, they dollarized, to tame hyperinflation, restore stability enhance budget discipline and monetary credibility. All we should do in the interim is not to disturb the forex regime,“ he said.

The BOG, which imposed the new rules Wednesday, also  banned commercial banks and other financial institutions from issuing cheques and cheque books on foreign exchange accounts (FEA) and  foreign currency accounts (FCA).

The central bank went on to direct banks not to grant a foreign currency-denominated loan or foreign currency-linked facility to a customer who is not a foreign exchange earner. 

Offshore foreign deals by resident companies, including exporters in the country, has also been prohibited. 

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