The Bank of Ghana (BoG) has suspended the forex licences of Fidelity Bank Ghana Limited and First National Bank Ghana Limited for violating the rules of the Ghana Interbank Forex Market.
The two banks will not be able to engage in any forex transactions from 29th June 2023 to 28th July 2023, according to a press statement signed by Sandra Thompson, the Secretary of the BoG.
They have also been fined 1000 penalty points each, for breaching sections 3.4, 3.5, and 3.9 of the Ghana Interbank Forex Market Conduct.
Section 3.4 indicates that LFXDs are required to update indicative quotes for buying and selling US dollars at regular intervals, on the Reuters and Bloomberg information systems. Indicative quotes shall be updated at intervals of no more than 30 minutes. (This will show the price at which a market-maker is prepared to buy and sell at the minimum traded lots).
Trade Reporting on Platforms captured in 3.5 requires that all interbank FX trades must be booked on the Reuters platform and appropriately confirmed within five (5) minutes after the trade is concluded. These trades must also be reported in the daily FX report submitted to the Bank of Ghana.
Section 3.9 on the other hand, mandates the Bank of Ghana to publish the Ghana Cedi reference rate with respect to the US dollar on the Bank of Ghana website by 16:30 hours GMT daily except on holidays.
“The reference rate shall be computed using the weighted average exchange rate of all eligible US dollar transactions that are reported to the Bank of Ghana by the cut-off time of 15:30 hours GMT. The Bid and Offer reference rates are calculated by taking a +/- 0.05% bid/ask spread around the weighted average exchange rate. The reference rate will also be published on Reuters and Bloomberg by 16.30 hours GMT,” it adds.
Fines and Suspension of Forex Licences of Fidelity Bank Ghana Limited and First National Bank Ghana Limited pic.twitter.com/WjGVpIeDme
— Bank of Ghana (@thebankofghana) June 29, 2023
Meanwhile, the Central Bank has cautioned forex market players including banks, forex bureaus, forex brokers, and money transfer operators (MTOS) to adhere strictly to the applicable forex market regulations and guidelines.
The BoG is the regulator and supervisor of the banking and non-banking financial institutions in Ghana. It is also responsible for ensuring the stability and soundness of the financial system. The BoG has recently clamped down on forex activities in the country to curb illegal transactions and protect the local currency.
In May 2023, the BoG revoked the licences of five forex bureaus for various offences including operating without authorisation, failure to comply with anti-money laundering requirements, and falsification of documents. The affected forex bureaus were Ocean Drive Forex Bureau, Kafsons Forex Bureau, Fatcoms Forex Bureau, Nabrim Forex Bureau and Sears Forex Bureau.