BoG’s stringent forex ID requirements take effect today

By Joshua Worlasi AMLANU

The Bank of Ghana (BoG) has announced a centralised foreign exchange trading platform, which requires that all persons seeking to buy or sell foreign currencies provide a Ghana Card or passport for foreign nationals and undergo biometric verification.

The move is a futher effort to ensure safe and sound operations of the foreign exchange business and is set to go live today, August 1, 2024.

It mandates all licenced foreign exchange bureaux to conduct their buying and selling of foreign currencies through this platform.

The platform’s launch comes at a time when the cedi has been facing pressures in the foreign exchange market. Data from BoG indicate that from January to July 19, 2024 the cedi depreciated by 19.6 percent against the US dollar, a slight improvement from the 22.1 percent depreciation observed during the same period last year.

The BoG in a statement said introducing this centralised system represents a crucial step in the central bank’s ongoing efforts to ensure safe and sound foreign exchange operations.

The Bank aims to enhance oversight capabilities for bureau management and directors while simultaneously strengthening BoG’s ability to monitor and supervise these operations.

The new platform is designed to facilitate compliance with key financial regulations, including the Foreign Exchange Act of 2006 and Anti-Money Laundering Act, as amended. It also aligns with other relevant notices and enactments governing the forex market in Ghana.

To maximise the system’s effectiveness, BoG has outlined several key requirements. Notably, all foreign currency transactions must now be conducted exclusively through licenced dealers, including authorised Foreign Exchange Bureaux. The central bank has made it clear that all bureau transactions must be processed through the new trading platform without exception.

In a move toward greater transparency and accountability, bureaux are now required to issue electronic receipts for all foreign currency purchases and sales. This measure is expected to create a more robust audit trail and enhance customer protection.

The BoG has also integrated stringent identity verification measures into the new system.

“In line with Bank of Ghana’s Notice No. BG/GOV/SEC/01, all persons seeking to buy or sell foreign currencies must provide a Ghana Card or passport for foreign nationals and undergo biometric verification,” the BoG statement read.

This integration with the National Identification System ensures that all forex transactions are conducted by verified individuals, adding an extra layer of security to the process. Furthermore, the platform will be linked to the national payment system, facilitating electronic payments and receipt of Ghana cedis for foreign currency transactions at bureaux.

Market  analysts suggest that this new system could potentially help stabilise the forex market.

The relative stability observed in the forex market over recent weeks has been attributed to several factors, including BoG’s tight monetary policy stance and the implementation of a dynamic Cash Reserve Ratio to manage excess liquidity.

Additionally, revised regulations on advanced payments for imports and positive sentiment from the IMF’s Extended Credit Facility have contributed to this stability.

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