BoG Reviews Forex Measures

Dr Benjamin Amoah
The Bank of Ghana (BoG) has finally reviewed the foreign exchange measures introduced in February, this year to streamline foreign exchange market operations to shore up the cedi.

The review, according to the Central Bank, was to plug the leakages and enhance the supply of foreign exchange to the markets.

Since the introduction of the new measures, many businesses and institutions have called for review, claiming the measures were negatively affecting the operations of importers and exporters.

Announcing the new revision at a press conference in Accra, Dr Benjamin Amoah, Head of Financial Stability Department at BOG said, ‘Without prejudice to the limit of $10,000 withdrawal per travel, and the $10,000 annual transfer without documentation, over-the-counter cash withdrawals from FCA and FEA would be permitted up to a limit of $1,000 or its equivalent per transaction in foreign currency.’

He said the 60-day mandatory repatriation of export proceeds had been reversed and aligned to the terms agreed between trading parties.

Dr. Amoah said the five-day mandatory conversion of export receipts into Ghana cedis had been reversed, stating that ‘exporters can now retain up to 60 percent of their export receipts in their FEAs, and the remaining 40 percent converted at market rates within 15 working days.’

He said with the allowance of 60 percent retention to exporters, the margin account would no longer be required for such exporters.

‘However, importers may continue to use the margin account (operated by the banks on their behalf) to build up foreign exchange to be used exclusively for the purpose for which it is open,’ Amoah said.

He said exporters of goods and services may receive payment in foreign currency from non-residents, explaining that by implication, hotels, educational institutions, among others, may receive payment from non-residents in foreign currency.

The threshold for transfers abroad without initially submitting documentation has been increased from $25,000 to $50,000, Dr Amoah said.

The Head of Financial Stability Department at BOG said where documentation in respect of a transfer remains outstanding, any subsequent import transaction by the importer, irrespective of value, can only be made on prior provision of documentation required for the current import transaction.

Dr. Amoah added that foreign currency loans may be granted by resident banks for international trade-related transactions.

‘To minimize disruption to contracts already entered into by banks and their clients, all undrawn balances on foreign currency facilities can now be drawn in the original currency,’ he said.

He said in order to assist importers who purchase goods from multiple sources abroad, the Bank of Ghana (BoG), in collaboration with banks, will encourage the use of non-cash instruments (plastic cards) by traders.

Dr. Amoah said the BoG will also increase the limits on cards beyond $10,000 (but not exceeding $50,000) to meet their legitimate needs, stating that ‘this should be supported on return by relevant documentation.’

He noted that foreign exchange is freely transferable to meet legitimate external payment obligations.

‘The Ghana cedi remains the sole legal tender in Ghana. Therefore, pricing, advertising, invoicing, receiving, and making payments for goods and services should be done in Ghana cedis, unless otherwise authorized by the Bank of Ghana (BoG),’ Dr. Amoah said.

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 By Cephas Larbi

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