In a move that has sent ripples across Ghana’s financial and corporate sectors, the Bank of Ghana (BoG) has issued a decisive directive barring commercial banks from disbursing foreign currency cash to large corporates unless such transactions are backed by equivalent deposits.
The policy, announced in a notice, takes immediate effect and is designed to safeguard the country’s foreign exchange reserves and restore stability to the forex market.
According to the central bank, commercial banks can only process such payments when they are “fully supported by equivalent foreign cash deposits lodged by the same institution at the Bank.” This marks a significant shift from past practices where certain large corporates accessed forex directly without prior deposits.
Why the BoG Took This Step
The BoG explained that the directive was influenced by the rising trend of large corporates—including bulk oil distribution companies, mining firms, and other multinationals—drawing foreign currency cash from banks without adequately funding such withdrawals. This practice, the central bank noted, exerted unnecessary pressure on the foreign exchange market, weakening its efforts to stabilize the cedi and maintain macroeconomic balance.
In recent months, Ghana’s currency has shown signs of strain despite multiple policy interventions, including forex auctions and liquidity injections. By halting unbacked withdrawals, the BoG hopes to reduce artificial demand for dollars and protect forex reserves.
To reassure industry players, the BoG emphasized that the directive is not intended to cripple business operations. Rather, it is meant to ensure efficiency and transparency in the allocation of scarce forex resources.
“In partnership with the government, mechanisms have been put in place to source and provide foreign exchange liquidity to meet the legitimate import obligations of large corporates.”
Bank of Ghana
This means that sectors critical to Ghana’s economy—such as petroleum supply, mineral exports, and other essential imports—will still be supported, but through a more regulated and accountable framework.
The new directive sends a strong message to corporates that the days of easy, unbacked access to foreign currency are over. For years, concerns have been raised about how bulk withdrawals by large firms created shortages in the market, driving up exchange rates and creating volatility for smaller businesses and consumers.
By insisting on deposits before withdrawals, the BoG is effectively pushing corporates to plan their forex needs more responsibly. This could lead to a more predictable market environment, where demand and supply are better aligned.
Sanctions Await Non-Compliant Banks
The central bank did not mince words regarding compliance. It cautioned that any commercial bank that disregards the directive will face severe regulatory sanctions.
“We expect all banks to comply strictly with this directive and to cooperate fully with the Bank of Ghana in ensuring that available foreign exchange resources are applied efficiently and transparently.”
Bank of Ghana
This warning underscores the seriousness of the policy. Banks that attempt to circumvent the directive risk fines, restrictions, or even reputational damage in an already competitive financial sector.
Meanwhile, Market watchers believe the move will have both short-term and long-term implications. In the short term, some corporates may face delays in accessing foreign currency, particularly if they have not built adequate reserves. This could create initial bottlenecks in sectors such as oil importation or mining exports.
However, in the long term, the policy is expected to strengthen the forex market by reducing speculative demand and stabilizing the cedi. Small and medium enterprises (SMEs), which often struggle to compete with larger firms for forex access, may also benefit indirectly from a more balanced system.
The Bank of Ghana’s directive is a bold attempt to restore discipline to Ghana’s foreign exchange market. By halting unbacked foreign currency payments to large corporates, the central bank is not only protecting the cedi but also sending a clear signal that transparency and accountability will define the future of forex operations in the country.
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