The Bank of Ghana has intimated that the number of bids submitted by banks at the latest forex forward rates auction have declined marginally by 11.5 percent compared to previous forex sales.
In a recent statement released by the Bank of Ghana, banks submitted a total of 100 bids at the forex forward rates auction held as against 113 bids submitted at last time’s forex sales, depicting a reduction in the demand for forex by banks.
Consequently, the bids cover ratio lingers around 3.09×, meaning that the worth of total bids submitted made up 3.09times the stipulated target set by the Bank of Ghana which is an indication of a weak demand compared to the last time’s forex auction where the ratio hovered around 3.43 times.
Additionally, the total number of bids submitted by banks were worth US$77.25 million and is much lower than last auction’s US$85.75 million, representing a decrease of about 10 percent.
In keeping with the stipulated target, however, only US$25 million worth of bids were accepted. Also, out of 100 bids submitted by banks, only 39 got accepted by the Bank of Ghana.
The results also shows that the 7-Day tenor had the highest number of bids submitted by banks, recording a total of 45 bids, bringing in approximately 45 percent of total bids submitted by the banks.
Detailing the number of bids banks submitted for each of the tenors, the report reveals that except for the 15-Day tenor which came close to the 7-Day tenor by recording 39 bids, all the other Tenor recorded low levels with 30-Day tenor having 9 bids, 45-Day and 60-Day tenors also recording very low levels of 3 bids each submitted and extremely lower levels of 1 bid submitted for the 75- Day tenor.
The report further asserted that even though the banks submitted up to 45 bids for the 7-day tenor, the Bank of Ghana accepted only 13 of the bids. In a similar vein, only a fraction of the bids submitted for the 15-Day tenor were accepted, with only 12 bids being accepted out of the total of 39 bids submitted as well as 1 bid got accepted for the 3 bids submitted under the 45-Day tenor. For the other tenors, all bids submitted by banks got accepted.
The Bank of Ghana also disclosed that for bids accepted, the 15-Day tenor logged in the highest minimum rate of 5.8225, and the 30-Day tenor had the highest maximum rate of 5.8500. For the range of rates for bids submitted, the 30-Day tenor recorded the highest reaching from 5.8225 and extending up to 5.8500. The remaining tenors also recorded a similar but marginally smaller range of rates.
The 60- day and 75-day tenors for instance had their range of rates for bids submitted being the same as the bids accepted extending from approximately 5.7928 to 5.8 and 5.7860 to 5.7860, respectively.
It must also be noted that some of the bids were put down as null and void. The total number invalid bids submitted by banks summed up to US$ 250,000 and according to the Bank of Ghana’s statement, they were rendered inadmissible because they “did not meet the forex forward auction guidelines”.
This is contrary to the immediate past two forex sales where all bids submitted were deemed valid but they were not accepted because of the target amount set.
