BoG restores forex licenses of Fidelity Bank and First National Bank

The Central Bank had temporarily suspended these financial institutions for breaching certain sections of the Ghana Interbank Forex Market Conduct rules, as confirmed by the BoG.

In response to the breach, Fidelity Bank and First National Bank were fined a combined total of 1000 penalty points each and were prohibited from engaging in forex trading from June 29 to July 28, 2023.

However, the Bank of Ghana has decided to ease the sanctions, allowing the banks to resume forex trading before the initial suspension period expires.

The Governor of the Bank of Ghana, Dr. Ernest Addison, informed the media that the licenses of both banks were restored two weeks ago, and the punishment was reduced by half.

Consequently, the banks were suspended for only two weeks, and they have been back in the market for some time now.

The specific breaches by the banks

The banks were penalized for breaching 3. 4, 3.5 and 3.9 of the Ghana Interbank Forex Conduct rules.

Section 3.4 of Ghana Interbank Forex Market Conduct rules deals with indicative quotes which require the banks to update indicative quotes for buying and selling US dollars at regular intervals, on the Reuters and Bloomberg information systems.

Indicative quotes shall be updated at intervals of no more than 30 minutes. (This will show the price at which a market-maker is prepared to buy and sell at the minimum traded lots).

For section 3.5, it is on trade reporting platforms.

Specifically, all interbank FX trades must be booked on Reuters platform and appropriately confirmed with five minutes after trade is concluded.

These trades must also be reported in the daily FX report submitted to the Bank of Ghana.

The two banks also failed to adhere to section 3.9 on the fixing of the official exchange rate.

It states that, “the Bank of Ghana shall publish the Ghana Cedi reference rate with respect to the US dollar on the Bank of Ghana website by 16:30 hours GMT daily except on holidays. The reference rate shall be computed using the weighted average exchange rate of all eligible US dollar transactions that are reported to the Bank of Ghana by the cut-off time of 15:30 hours GMT. The Bid and Offer reference rates are calculated by taking a +/- 0.05% bid/ask to spread around the weighted average exchange rate. The reference rate will also be published on Reuters and Bloomberg by 16.30 hours GMT.”