The Bank of Ghana (BoG) has recommended to the government to review existing agreements with the mining and oil and gas companies to open and operate retention accounts with the BoG or any commercial bank in the country.
The move is to help reduce capital flight that has brought pressure on the cedi and consequently led to a loss in its strength against major trading currencies such as the dollar.
The Head of Financial Stability at the BoG, Dr Benjamin Amoah, at a news conference in Accra yesterday, said the central bank would guarantee the companies the availability of foreign exchange within 24 hours of request.
“All new retention agreements should require retention accounts to be opened and operated with domestic banks. The BoG will engage the Ghana Investment Promotion Centre, the Ghana Free Zones Board, the Minerals Commission and other stakeholders in this regard,” he said.
According to Dr Amoah, the central bank was also recommending that all foreign exchange proceeds of government agencies be lodged with the BoG, instead of keeping them with off-shore banks.
Reversal of forex rules
The BoG has reversed some of the foreign exchange rules it introduced in February this year to stabilise the cedi against depreciation.
One of the rules was that customers were not allowed to make withdrawals of more than US$10,000 over the counter without proof of travel.
However, per the revision, customers can make large transactions over the counter, provided they prompt their banks a couple of days before the withdrawal.
Meanwhile, they can only withdraw up to $1,000 over the counter without prompting their banks.
“This is a cedi-denominated economy; if you want cedis, your bank can get it, but if it is in foreign currency, you need to prompt your bank. If it’s a large transaction, you need to prompt your bank. But for now only $1,000 is permitted,” Dr Amoah said.
Under the previous rules, banks were not allowed to give out foreign exchange loans. However, the BoG has revised that law and will now allow banks to give loans in foreign currency.
Also, the threshold for transfer abroad without initially submitting documentation has been increased from US$25,000 to US$50,000 per the revision.
Documentation on that transaction must be provided within 90 days.
The BoG will now allow businesses that provide services for non-resident Ghanaians to use dollars.
Exporters of goods and services can now also receive payment in foreign currency from non-residents. This means hotels, educational institutions, among other bodies, may receive payments from non-residents in foreign currency.
The prohibition of offshore currency transactions by resident Ghanaian companies, as well as restrictions that require exporters to collect and repatriate in full the proceeds of their exports to their local banks within 60 days of shipment, has also been relaxed.
The 60-day mandatory reparation of export proceeds has been reversed and aligned to the terms agreed between trading partners.
The five-day mandatory conversion of export receipts in Ghana cedis has also been reversed.
Exporters can now retain up to 60 per cent of their export receipts in their foreign exchange accounts and the remaining 40 per cent converted at market rates within 15 working days.
Meanwhile, the BoG says developments in the cedi–dollar exchange rates, according to an analysis of its data, show that the pace of depreciation has slowed.
Monthly depreciation declined steadily from a peak of 7.8 per cent in January to 2.7 per cent in May this year.
Source: Graphic Online