The Cedi experienced a significant appreciation against the US dollar on Tuesday, June 4, following a series of interventions by the Bank of Ghana (BoG). The Central Bank injected $12 million into the interbank market and simultaneously intensified its crackdown on illegal forex operators, leading to reduced activity in the forex market.
These actions by the BoG caused the dollar rate to plummet, dropping from ¢16.30 to ¢15.50 at many forex bureaux in a single day. However, the reduction on the interbank market was more modest. The BoG sold its $12 million at a rate of ¢14.95 per dollar, slightly below the ¢15.10 rate offered among banks. On Tuesday, forex trading opened with the dollar trading at ¢14.98 for bids and ¢15.18 for offers, compared to Monday’s rates of ¢15.00 and ¢15.20 respectively.
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According to The Accra Times sources, demand for the dollar dropped significantly at the forex bureaux and the black market following news of the planned arrest of illegal operators. This led to a drop in the dollar rate as buyers stayed away, fearing arrest. The reduced demand on the retail market also affected the interbank market, leading to reduced activity there as well. Additionally, it was reported that the Central Bank was able to meet the forex needs of importers, reducing the need for traders to purchase dollars at higher rates on the retail market.
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However, when The Accra Times reached out to the leadership of the Ghana Union of Traders Association, they stated they were unaware of any such arrangement.
Two weeks ago, the Governor of the Central Bank announced a series of measures to curb the depreciation of the cedi, which has lost over 20% of its value on the retail market and more than 14.6% on the interbank market. These measures include collaborating with the Financial Intelligence Centre to crack down on illegal operators, increasing monitoring of Forex Bureaux to ensure regulatory compliance, and establishing a task force to oversee adherence among Forex Bureaux. Additionally, forex bureaux have been prohibited from publishing their rates on social media and outside their premises.
Market watchers remain uncertain about the sustainability of these measures if the actual supply of dollars does not improve.
