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BoG moves to strengthen cedi

June 9, 2016, 10:06 a.m.

The Bank of Ghana (BoG) has initiated moves to bring more stability to the local currency with the introduction of some regulations.

The Ghana cedi has remained relatively stable against the major foreign currencies particularly the US dollar but its performance has been overshadowed by other Africa currencies which have been performing better.  

As at June 1, the cedi had lost about 1.2 percent in value against the US dollar.

But the BoG in a bid to consolidate the gains and avert turbulence has introduced measures to deepen the foreign exchange market and promote greater transparency in the determination of the exchange rate.

As part of the measures, it is amending the requirements for surrender and repatriation of export receipts.

With effect from July 1, 2016, the portion of foreign exchange receipts from the export of minerals and cocoa (other than the proceeds of the cocoa syndicated loan) that was subject to surrender would no longer have to be surrendered to the BoG but   directly to the commercial banks.

Importantly, all exporters, except those who operate in accordance with Retention Agreements and who have been permitted to operate accounts offshore, would also be required to repatriate in full, all their export receipts to banks in Ghana. 

This will be credited into their foreign exchange accounts (FEA) or converted into cedis on need basis.

Meanwhile, rules on repatriation of export proceeds require that all exporters of goods and services, with the exception of those with retention agreements are obliged to repatriate to Ghana all export proceeds.

“Exporters who operate in accordance with retention agreements and who have been permitted to operate accounts offshore are also allowed, until further notice, to retain in their offshore accounts the portion of export proceeds as provided for under the retention agreements,” the BoG said.

The bank further stated that all other exporters shall ensure repatriation of export proceeds in accordance with the terms of export, provided that all export proceeds shall be received and repatriated immediately within a period not exceeding 60 days from the day of shipment of goods.

Export proceeds shall also be repatriated through an external bank to exporter’s Foreign Exchange Account (FEA) opened with a local bank which endorsed the export documents, it concluded.