Pressure on cedi continues as $75m BoG forex auction oversubscribed 3.6 times
The cedi is anticipated to experience further depreciation against the US dollar and other major currencies in the coming days.
This is due to the continuous high demand for the greenback from the Central Bank by businesses in the country.
Since the beginning of this year, demand for dollar the by banks, businesses and particularly importers and exporters has seen a huge increment.
The high demand for the cedi’s anchor currency (dollar) has resulted in the local currency’s depreciation rate of 14.6% against the dollar as at mid-March 2022.
The rising demand for the greenback by banks, businesses exporters and importers is evidenced by the recent oversubscription of the Bank of Ghana’s (BoG) dollar auction by $179.5m – bid cover ratio is 3.6 times.
The Central Bank in its forex forward rates auction on Tuesday, March 22, 2022, met its target of auctioning $75 million to bidders for the dollar.
The $75 million was however out of a total of $272.5 million bids submitted by banks, importers, exporters and businesses that have need of the greenback for their transactions.
In accepting the $75 million bids made, the BoG rejected bids to the tune of $179.5 million made by buyers.
Bids by buyers were made for the 7 day, 15 day, 30 day, 45 day, 60 day and 75 day tenors.
Total bids submitted for the 7 day tenor amounted to $111.75 million of which the BoG accepted $22.75 million.
For the 15 day, 30 day, 45 day, 60 day and 75 day tenors, bids made totaled $89.75 million, $39.5 million, $15.5 million, $10.75 million and $5.25 million respectively.
The BoG, for the 15 day, 30 day, 45 day, 60 day and 75 day tenors accepted bids totaling $24.25 million, $14.75 million, $6.5 million, $4.75 million and $2 million respectively.
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.
Fx Forward Auction Result No 0065 by Fuaad Dodoo on Scribd
