BoG to auction US$715 million in 2020 to fight cedi depreciation

The Bank of Ghana (BoG) is set to auction US$715 million in Forward Foreign Exchange Auctions for the year 2020.

Per the schedule released by the Bank of Ghana, the central bank will have the highest auction of 80 million dollars each in January, February and March 2020.

According to the Bank of Ghana’s Foreign Exchange Forward Auction guidelines issued on 23 September 2019, the bids are invited as per the prescribed format to purchase or sell US dollar against Ghana cedi separately on each auction date.

The move to auction such an amount of US dollars is expected to help arrest, to some extent, the perennial depreciation of the cedi.

Following recent trends, the cedi is expected to depreciate by about 13% to the US dollar in 2019.

The Bank of Ghana, in October, began a Foreign Exchange Forward Rate Auction limited to 7-day, 15-day, 30-day, 45-day, 60-day and 75-day tenors.

In addition to the auction guidelines, all Authorised Foreign Exchange Dealer Banks were to comply with the provisions of the Code of Conduct for the Interbank Foreign Exchange market in Ghana.

Since the introduction of Foreign Exchange Forward Rate Auction, it has been recording a significant oversubscription.