Editorial: BoG settles on a centralised foreign exchange trading platform

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.

It is to ensure safe and sound operations of the foreign exchange business and was set to go live yesterday, August 1, 2024. It mandates all licenced foreign exchange bureaux to conduct their buying and selling foreign currencies through this platform.

This 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.

In a statement, BoG 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.

Thus, all foreign currency transactions must now be conducted exclusively through licenced dealers, including authorised Foreign Exchange Bureaux. This means all bureau transactions must be processed through the new trading platform without exception.

Also, to promote 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.

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

Additionally, 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 have expressed hope that this new system could potentially help stabilise the forex market. As regulator of the banking landscape, BoG is exercising its oversight responsibilities and putting in checks and balances to ensure a smooth forex environment.

These are strictly aligned to regulations like the Foreign Exchange Act and Anti-Money Laundering Act, and therefore perfectly in order.

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