The Central Bank from January to April this year, has injected more than $363 million into the local forex market through its Forex Forward Auction programme.
According to data released by the Bank of Ghana (BoG), bids submitted during the auctions in the four months period amounted to $662.65 million, with $531.65 million submitted at the end of the first quarter and the remaining $129 million in the month of April alone.
Bids submitted were for the 7-day, 15-day, 30-day, 45-day, 60-day, and 75-day tenors. The forex forward auctions of the BoG continue to drive the stability of the cedi this year despite the weakening effect the pandemic has on the local currency.
The Ghanaian Cedi, has so far for the first quarter of 2021, appreciated by 0.5 percentage points against the American dollar.
Market analysts have asserted that the cedi this year is expected remain relatively stable against the dollar this year, replicating its sterling performance against the greenbuck last year, following the issuance of the $3 billion Eurobond last month supported by foreign exchange to be earned from exports.
The BoG has increased the amount of dollars it intends to sell to businesses, investors and banks in its Forex Forward Auctions programme to $775 million this year.
The amount represents an increase of $60 million compared to some $715 million sold by the Central Bank in 2020.
Increment in the BoG’s Forex Forward Auctions can be described as efforts by the Bank to deal with the usual high demand of dollars by businesses to finance imports for the first quarter of every year which usually leads to a depreciation of the cedi.
BoG has maintained that its Forex Forward Auction programme has helped deal with businesses trying to secure dollars now for future transactions as well as activities of speculators in the country.