Business News of 2014-02-12

BoG directive triggers panic withdrawals

Some customers having dollar accounts in banks have started withdrawing their monies after the Bank of Ghana (BoG) directive to contain the depreciation of cedi.
The Bank of Ghana on Wednesday directed that all money transactions in the country should be conducted in the Ghana cedi, the sole legal tender.
It also directed all banks not to grant a foreign currency-denomination loan or foreign currency-linked facility to a customer who was not a foreign exchange earner.
On visits to some banks the Daily Graphic learnt that the directives were being implemented and that some customers were withdrawing their dollars but were being paid in Ghana cedis.
At the Airport branch of the Access Bank, the Manager, Mr Bernard Arthur, said few of the dollar savings customers had come around to withdraw the monies in their dollar accounts but received the cash in cedis as directed.
Since the announcement, Mr Arthur said, customers had been trooping in to enquire about the directive and its impact on their dollar savings.
He indicated that some of the customers were disappointed upon learning that the new directive did not allow them to take money in dollars except when travelling outside and which should also not exceed $10,000.
Customers who thought they could get their monies in dollars immediately after the directive were also disappointed as they were given cedis for their dollars.
Commenting on the directive by the BoG, Mr Arthur said it was good but had its own shortcomings, suggesting that the economy of Ghana could do better if more attention was given to the export sector.
At the Stanbic Bank headquarters, the Head of Global Markets, Mr Inusah Musah, said they were receiving calls from clients to enquire about the directive and its impact on their dollar accounts.
He said his outfit was ready to sensitise its customers through different platforms for them to understand the way the directive would work irrespective of their area of business.
“Initially, some people used to buy the dollar and then just put it in their account. However, due to the directive such transactions would no longer hold,” he stated.
He said most countries were making reforms to enhance their economies and using their own denominations was one of the reforms so Ghana was not far from achieving its intention with the new directives.
Some hotels have implemented the directives given by the Bank of Ghana to quote their rates in the Ghana cedi while others were yet to adopt the directives.
The BoG, as part of its measures to stem the free fall of the cedi, has directed all institutions, including those in the hospitality industry, to desist from pricing or accepting foreign currencies for their products.
A visit to some hotels in Accra indicated that some hotels had changed their rates to only cedis while others still had their rates in dollars alongside the cedi.
At the Holiday Inn hotel, for instance, the Sales Executive, Mr Sheriff Sikiru, said they had already converted their rates into cedis, saying that the rate used to be in both dollars and cedis.
He said they had to educate their clients on the directive since most of them were foreigners who paid them in dollars. Currently, he said the hotel was not quoting prices in dollars.
However, Movenpick was still quoting the dollar in its business.
A source at the hotel said management was holding meetings on the implementation of the directives and was expected to make the final decision on Monday, February 10, 2014.
Other hotels were still quoting the dollars alongside the cedi with the intention to adjust to the new directive as time went on.
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