Central Bank continues to exceed forex auction targets as high demand for dollar persists
The Central Bank of Ghana has once again in its most recent forex auction, exceeded its target by some $53 million.
The Central Bank at the end of Tuesday’s auction received bids totalling $103 million from banks and businesses for its forex although it was only expecting some $50 million in total bids for the greenback.
The oversubscription of the Bank of Ghana’s (BoG) forex auction has been the trend for some weeks now as businesses are now in dire need of the dollar particularly for imports ahead of the Christmas festivities.
The Central Bank in its last forex auction on September 22, had its dollar auction oversubscribed by 167.5 percentage points.
The high demand for the dollar is expected to put pressure on the cedi and cause it to depreciate against the major trading currencies especially against the American dollar.
But that is unlikely to be the case this year as the cedi has this year also recorded an impressive year-to-date depreciation rate of 1.8% against the dollar, the lowest in almost three decades.
Also, the Central Bank is expected to receive the first tranche of the $1.5 billion Cocoa Syndicated Loan for the 2021/2022 cocoa season, and it is expected that the BoG will use the $750 million received from the loan facility to support the cedi thereby ensuring its stability against the dollar.
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In accepting the $50 million bids made during its most recent auction, the Central Bank rejected bids to the tune of $53.25 million made by buyers.
Bids by buyers were made for the 7-day, 15-day, 30-day and 45-day tenors.
Total bids submitted for the 7-day tenor amounted to $64.25 million of which the BoG accepted $24.25 million.
For the 15 day, 30 day and 45 day tenors, bids made totalled $28.5 million, $8.5 million, $2million respectively.
The BoG, for the 15-day, 30-day and 45-day tenors accepted bids totalling $16.75 million, $8 million, $1 million respectively.
No bids were made for the 65-day and 75-day tenors.
The BoG’s forex forward auction programme is to help govern the conduct of forex auctions on the interbank foreign exchange market, deepen the forex market and reduce uncertainty on the future availability of dollars to meet the forex need of banks, importers, exporters and other businesses.
Peruse details of the forex forward auction below:
Fx Forward Auction Result No 0051 by Fuaad Dodoo on Scribd
