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An economist Dr Ebo Turkson has indicated that the rules governing the process for the auction of the $1.8bn cocoa syndicated loan may put excessive pressure on the commercial banks.
Dr Ebo Turkson told Accra-based Citi FM that the move may affect the FX market positively in the short term but may not be sustainable in the long term.
“Even though a central bank can intervene to keep the exchange rate in check, as to actually it will hold in check the rate at which the currency depreciates, I cannot tell,” he opined.
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He further argued that the BoG is indirectly controlling FX prices with this move.
“This is an indirect way that the Central Bank wants to control the price not through the demand offer but pricing through the price of the auction.”
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The Bank of Ghana (BoG) will today (Wednesday) begin this year’s dollar auction for commercial banks in the country to help stabilise the cedi.
Per the rules of the auction, it is limited to the purchase or sale of the US Dollars (USD) with equivalent value in the national currency – Ghana Cedi.
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Meanwhile, only authorised Foreign Exchange Dealing Banks will be allowed to partake.
Each eligible bank is allowed to submit a maximum of [3] bids in the auction, quoting their desired amount and at their freely determined exchange rate as per quotation convention.