The Bank of Ghana (BoG), in collaboration with security agencies, is set to embark on another round of extensive arrests of black-market forex operators. This initiative aims to clamp down on their activities and curb the depreciation of the cedi.
The local currency lost more than 19.6% of its value against the dollar by mid-July, according to the Bank of Ghana. This depreciation is even more pronounced at the forex bureaux. The continuous decline of the cedi, coupled with expectations of further depreciation as importers begin placing orders for Christmas, has prompted the BoG to implement new measures to stabilize the currency.
The Central Bank has launched a new centralized trading platform that all licensed Foreign Exchange Bureaux must use, enabling the Bank to monitor forex transactions in real time.
The BoG’s statement publicised on July 31, also reiterated that starting August 1, 2024, all foreign currency transactions must be conducted only through licensed dealers. While this directive already existed, its inclusion in the press release underscores the BoG’s intention to provide legal backing for the arrest and prosecution of black-market operators. According to sources close to The High Street Journal, previous arrests failed to lead to successful prosecutions due to a lack of clear regulations.
With the newly announced directive, the BoG and security agencies now have a stronger legal framework to prosecute individuals trading foreign currency without a license from the Central Bank.
Sources indicate that a series of arrests and prosecutions could commence soon as the BoG enforces its threats issued in May to sanitize the forex exchange market and check the overpricing of the dollar, which is contributing to the cedi’s depreciation.
Previous arrests had only a temporary impact on the cedi’s performance, with relative stability lasting just a few days. It remains unclear how intensive and sustained the upcoming enforcement efforts will be and to what extent they can help curb the cedi’s depreciation, especially given the short supply of dollars.
