Central Bank holds fourth foreign exchange auction for 2023
The Central Bank of Ghana has continued its commitment to promoting stability and transparency in the foreign exchange market by holding its fourth forward foreign exchange auction for 2023.
The auction, which saw $30 million in foreign exchange provided to Bulk Oil Distribution Companies (BDCs) at a fixed rate of GHS 12.12 pesewas per dollar, is part of the Bank’s new forward auction format, which aims to reduce uncertainty and promote price discovery in the downstream sector.
The auction, which took place on Friday, February 24th, 2023, saw 20 BDCs submit bids ranging from GHS 10.75 to GHS 12.20. This comes after the Bank’s third forward forex auction held on Valentine’s Day, which saw 30 BDCs submit bids ranging from GHS 10.55 to GHS 11.2. The Central Bank plans to sell a total of $200 million to BDCs during the first quarter of 2023.
The purpose of the forward foreign exchange auction is to stabilize the market and ensure consistency in the pricing of downstream products. By offering a fixed amount of foreign exchange at a fixed rate, the Central Bank aims to reduce uncertainty and promote transparency and efficiency in the foreign exchange market.
This shift in the Central Bank’s foreign exchange policy aligns with its commitment to creating a more stable and predictable business environment in Ghana.
BDCs play a critical role in Ghana’s downstream petroleum sector by importing, transporting, and distributing petroleum products across the country. They are major stakeholders in the industry and play a key role in ensuring an adequate supply of petroleum products to consumers.
The Central Bank’s commitment to providing foreign exchange to BDCs at a fixed rate is expected to have a positive impact on the economy by creating a more stable and predictable business environment.
Overall, the Central Bank’s commitment to promoting stability and transparency in the foreign exchange market is expected to bring numerous benefits to Ghana’s economy and its people. This is expected to attract more foreign investment, increase economic growth and development, and create more jobs for Ghanaians.
The Central Bank’s new forward auction format is also expected to bring increased transparency and efficiency to the foreign exchange market, further promoting stability and predictability in Ghana’s economy.
