In this last quarter of the year, the Bank of Ghana is targeting to auction an amount of US$ 125 million under its new Competitive Multiple-priced Foreign Exchange Forward Auctions programme.
This is according to BoG’s newly introduced Auction Calendar for Forward FX Auctions.
The multiple-price forward FX auctions will further aid in finding the proper price of the currency, deepen the FX market and reduce uncertainty on the future availability of the FX to meet the FX need of the banks’ clients.
For the months of October and November, a total of US$ 50 million is being offered for each, whereas in December, the BoG will offer US$ 25 million.
The auctions shall be limited to the purchase or sale of the United States Dollar (USD) against the equivalent value in the national currency – Ghana Cedi (GHS) – on a forward basis at various tenors including but not limited to 7-day, 15-day, 30-day, 45-day, 60-day and 75-day tenors.
The maiden foreign exchange forward auction was oversubscribed by the commercial banks who placed bids worth well above at US$ 51.3 million.
However, the central bank only accepted price bids for transactions of 7 days and 15 days tenors which cumulatively amounted to US$16.75 million.
The quotation of rates for bids placed in the auction shall indicate the equivalent value in the national currency (Ghana Cedi/ GHS), expressed against one unit of the USD quoted up to 4 decimal places.
Each bank is permitted to submit a maximum of three bids per tenor in the auction, quoting their desired amount and at their freely determined exchange rate as per quotation convention.
According to the Guidelines, the minimum bid size is US$500,000 and in multiples of US$250,000, and expressed in numbers. Maximum bid size of a single bid shall not exceed 10 percent of the announced auction target. The cumulative volume of all bids from any single bank shall not exceed 20 percent of the announced target for the auction.
(By Joshua W. Amlanu)