By The President of the Ghana Union of Traders Association (GUTA) has called on the Bank of Ghana (BoG) to relax the stringent documentation requirements that businesses must follow to exchange money.
Speaking on PM Express on JoyNews, Dr. Joseph Obeng stated that the current regulatory framework inadvertently drives more traders to engage with forex bureaus and the black market rather than mainstream banks.
He noted that “one thing that the Bank of Ghana is doing is that they do not recognise that we trade more with the forex bureaus and the black market than the mainstream banks.
“Because you know, the fear factor there is the documentation, the requirement, stringent documentation. They have to relax their stringent documentation.”
“If you make a stringent documentation requirement, then people do not transact through the banks. For the Bank of Ghana what you need is a bill of lading and then your transactional value, that should be enough for you. People will not be panicked about whatever the accounting aspect of all that.”
Dr. Obeng further argued that the central bank’s core mandate when dealing with businesses in foreign exchange should not involve accounting for every transaction in detail.
“Bring our document and all that is for GRA to do that. And they do post-clearance audits, and all that, all the time. Yours is to track the transactions that we do,” Dr. Obeng stated.
The current regulatory environment has resulted in a significant volume of trade being conducted in the black market rather than through formal banking channels.
“So Bank of Ghana is making a very serious mistake to the extent that people, when they get money, instead of pushing it through the banks, they just go and give it to the black market,” he said.
Dr. Obeng warned that the current situation causes the volume of trade to be centered on the black market rather than the banking sector, undermining the effectiveness of the Bank of Ghana’s monetary policies.
“if you mention the bank rate is GH¢14.3, nobody is even excited because they won’t transact through there (banks). But then there are the black market people who are detecting this pace, and we should know and observe this,” Dr. Obeng concluded.
This development comes in the wake of the Ghana cedi’s continued depreciation against the US dollar and other major foreign currencies due to increased corporate demand over the past month.
However, according to JoyBusiness reports, depreciation pressures on the cedi have slowed down owing to improved foreign exchange (FX) liquidity.
The report attributes this improvement to a substantial intervention by the Bank of Ghana in the market last week, wherein approximately $59 million was provided on the spot market, and an additional $20 million was auctioned to the Bulk Oil Distribution Companies.
This intervention by the central bank marks the most significant support provided in a week since the beginning of 2024.
Source: MyJoyOnline.com
