Central Bank provides $30m to Bulk Oil Distribution Companies in fourth forex auction
Ghana’s Central Bank has announced that it held its fourth forward foreign exchange auction for 2023, providing $30 million in foreign exchange to Bulk Oil Distribution Companies (BDCs) at a rate of 12.12 pesewas per dollar. The auction, which took place on February 24, 2023, saw 20 BDCs submit bids ranging from GHS 10.75 to GHS 12.20. This new approach is expected to bring increased transparency and efficiency to the foreign exchange market.
New Forex Auction Format Aims to Reduce Uncertainty and Promote Price Discovery
The Central Bank’s new forward auction format represents a shift from the previous approach of selling foreign exchange at a single rate determined by supply and demand. The new approach is intended to reduce uncertainty and promote price discovery in the downstream sector. By offering a fixed amount of foreign exchange at a fixed rate, the Central Bank aims to stabilize the market and ensure consistency in the pricing of downstream products. This is expected to improve transparency and efficiency in the foreign exchange market.
Further Auctions Planned
The Central Bank has announced a fifth auction worth $30 million to be held on March 14th, with a sixth auction planned for March 29th also worth $30 million. The Central Bank projects a total of $200 million to be sold to BDCs during the first quarter of 2023.
BDCs Play a Critical Role in Ghana’s Downstream Petroleum Sector
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.
Central Bank’s Foreign Exchange Policy Expected to Have Positive Impact on the Economy
The Central Bank’s foreign exchange policy is expected to have a positive impact on the economy by creating a more stable and predictable business environment. This is expected to attract more foreign investment, increase economic growth and development, and create more jobs for Ghanaians.
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. The new approach to foreign exchange auctions is a positive step towards achieving this goal, and the continued support for BDCs is critical to the success of Ghana’s downstream petroleum sector.
