[ 2016-11-30 ]

BoG to auction of $1.8bn cocoa loan to help stabilize cedi
The Bank of Ghana (BoG) will from this Wednesday,
November 30 start selling part of the $1.8 billion
dollar cocoa loan to commercial banks.
The Central Bank to this end has released
regulations for interested banks and the calendar
to guide the auction.

The Bank of Ghana in a notice said only those who
are licensed, can participate in the auction,
“participation in the auction is restricted only
to Authorized foreign Exchange dealing banks”.

It adds that authorise banks shall submit their
bids via a secured Bank of Ghana page on Reuters
Terminal or through a designated email in approved
format provided by the regulator.

Participating banks are permitted to submit
maximum three bids in the auction and quoting
their desired amount, however, each bank will be
allowed a minimum bid size of 500,000 and in
multiples of 250,000.

A Maximum bid size of a single bid shall not
exceed ten percent of the auction target, the
cumulative volumes from any single bid shall not
exceed 20 percent of the auction.

This should mean that no bank may get more 4
million dollars. According to the calendar, the
Bank of Ghana is planning to sell 60 million
dollars over the next four weeks.

The first auction will start on Wednesday,
November 29 which will see the Central Bank
auction $20 million. The second auction will take
place on December 14 with the final one being done
on $20 million.

The final auction will happen on December 28,
2016. However, some banks have told JOYBUSINESS
that the amount being put out is not enough to
meet their demands.

A source close to one the top banks in the country
has told JOYBUSINESS that what the Bank of Ghana
is planning to sell, will not even meet a quarter
of their demands.

This is because there are more businesses looking
for dollars to finance their imports for the first
quarter of 2017. This has raised questions about
whether, the auction will be enough to stabilize
the Ghana cedi, which has witness some consistent
drop in value marginally over the past four
weeks.

But the Bank of Ghana, on the other hand, is
challenging claims, arguing that apart from the
auction of the cocoa loan, which will be done
every quarter over the next 12 months, it is also
working to introduce additional interbank
interventions which actually started yesterday.

Some of the forex bureaus are selling 1 dollar at
4 Ghana cedis 20 pesewas whiles a commercial bank
is likely to quote 4 Ghana cedi 15 pesewas.

Source - Joyfm

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