Fight against illegal ‘dollar’ sales yielding results — BoG
THE Bank of Ghana (BoG) says efforts to sanitise the trading of foreign exchange (forex) are yielding the needed results.
It said while data showed that more people were now resorting to the licensed forex bureaus for their forex needs, the level of speculation on the cedi had reduced, leading to some respite for the local currency.
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Data showed that the cedi improved from a peak of more than GH¢15 to a dollar in the week beginning October 19 to about GH¢13.5 to a dollar in the first week of November.
Consequently, the Head of the Other Financial Institutions Supervision Department (OFISD) of BoG, Yaw Sarpong, told the Graphic Business yesterday that the central bank would continue with the measures aimed at weeding out the illegal traders to help restore discipline in the buying and selling of the US dollar, the British pound, the euro and the CFA franc, among others in the country.
Mr Sarpong was speaking to the paper on the recent revocation of the licences of the Trade House and the Airport City Forex Bureaux Limited in Accra.
Non-compliance
Last Thursday, the central bank revoked the licences of the two bureaus over their non-compliance to sections of the Foreign Exchange Act 2006 (723) of BoG.
The bank said the companies had contravened Sections 11 (1) and 12 (f) of the Act by failing to identify their customers, issue electronic receipts and setting prices in a way that is detrimental to customers.
Prior to the revocation of the licences, BoG and the Police, in September, swooped on illegal FX traders at Rawlings Park, Tudu, Cowlane, the Kwame Nkrumah Circle, Kinbu, Timber Market and Lava.
The exercise led to the arrest of 76 perpetrators who were alleged to be engaged in illegal trading for prosecution.
Cedi stability
Mr Sarpong said evidence showed that the measures had yielded the needed results and the central bank hoped to improve upon them.
“We do not intend resting,” he said, noting that the successes chalked up would motivate the stakeholders to keep up with the pressure.
It is obvious that speculation is playing a big role in the currency depreciation and we think that these actions will help fight speculation,” he said.
Mr Sarpong added that; “If you recall, when we did the swoops and the revocation, the cedi stabilised and it shows that these actions are having an effect.”
Also, the data show that after the actions, more people are now using the licensed forex bureau. So, the exercise has diverted traffic to the licensed ones.”
No resting
Mr Sarpong said the central bank now planned to enhance its supervision role to help sanitise the business further.
“By these actions, we have also sent signals to the industry that we will not countenance any action of theirs that goes against the law and all that is helpful in sanitising the space,” he said.
He explained that BoG was concerned about compliance to the rules and would use its powers to ensure that regulated stakeholders played within the law.
Administrative sanctions
Mr Sarpong, however, explained that the central bank was concerned about getting regulated entities to play within the rules rather than revoking their licences.
He said the issue of revocation was an action of last resort that BoG would not want to use but said the central bank would not hesitate to do that if an entity was found to be breaching the rules.
“Licence revocation is the last resort. We do not just get up and revoke licenses and that is why we are often accused of having waited too long because we always want to engage.
But when an institution is recalcitrant, then we can get in and revoke the licence,” he said.