According to the schedule released by the Bank of Ghana (BOG), it is expected from today January 11, 2021 to commence the multiple-price foreign exchange (FX) forward auction for the first quarter of 2022 with a proposed amount of $75 million.

The auctioning, which will be opened for only authorised foreign exchange dealing banks, is the first of six auctioning events to be held within the first quarter of 2022.

This is in line with the Bank of Ghana’s objective of periodically strengthening the local currency against the most common trading currencies, especially the US dollar through the release of $450 million into the foreign exchange market within the first quarter to fight depreciation of the local currency.

For the present, the multiple price FX forward auctions are aimed at aiding price discovery, deepening the FX market, and reducing uncertainty on the future availability of the FX to meet the need of the Bank of Ghana’s clients.

Timeline for the Auctions

Alongside the proposed amount fixed at $75 million per auction, the Bank of Ghana announced the dates as follows: January 11, 2022, January 25, 2022; February 8, 2022; February 22, 2022; March 08, 2022, and March 22, 2022.

A press statement signed by the Secretary of the Bank, Ms. Sandra Thompson, indicated that bids in accordance with the Foreign Exchange Forward Auctions guidelines, would be invited as per the prescribed format to purchase United States dollars against Ghana cedis, albeit separately on each auction date.

Ms. Sandra Thompson indicated that the bids be submitted through the Bank of Ghana’s email.

“The bids should be submitted via the dedicated email, [email protected].”
Ms. Sandra Thompson

The statement also noted that the receipt of bids would be between 9:30 am and 10:30 am of the announced date of the auction, while the announcement of results would be done at 15:00 hours on the same day.

Per the new arrangements, the bank of Ghana hinted of circulating a quarterly calendar to guide prospective investors.

“The Bank of Ghana will publish an auction calendar for the Foreign Exchange Forward Auction on a quarterly basis. The calendar will be published one week preceding the next quarter on the Bank of Ghana’s website.”
Ms. Sandra Thompson

Maximum of Bids Permissible

According to the guidelines, each bank is permitted to submit a maximum of three bids per tenor in the auction, while quoting their desired amount and at their freely determined exchange rate as per quotation convention.

The minimum bid size is $500,000 and in multiples of US$250,000 and expressed in numbers.

In accordance with the BoG directive, the maximum bid size of a single bid shall not exceed ten percent (10%) of the announced auction target.

The guideline also stipulated that, “The cumulative volume of all bids from any single bank shall not exceed 20 per cent of the announced target for the auction”.

In the intervening time, the latest Foreign Exchange (FX) forward rates auction by the Bank of Ghana (BOG) was oversubscribed by the forex licensed dealing institutions.