Business News of 2014-06-13

BoG set to ease foreign exchange restrictions

Bank of Ghana is set to ease restrictions it imposed in February on foreign exchange transactions in a bid to halt a slide in the cedi currency, governor Henry Kofi Wampah told Reuters on Thursday.

The February measures included an end to transfers between accounts denominated in foreign currency. Companies said this has hurt business and not supported the cedi, which has fallen 28 percent this year due to import demand and a weak fiscal environment.

"We are reviewing the measures tomorrow. The aim is to make it easier for people to transact business while still protecting our currency," Wampah told Reuters in a phone interview.

"We have been monitoring and listening to people's concerns. It is on account of this that we are reviewing," Wampah said.

The February rules included a directive that foreign exchange bought for settlement of import bills be lodged in a special margin account to be drawn within 30 days. The bank also stipulated that the proceeds from exports must be converted into cedis within five working days.

The International Monetary Fund said in May that the new measures would be ineffective unless Ghana resolved macro-economic imbalances including a high budget deficit and inflation.

Ghana has been struggling with budget deficits and high bond yields as well as the tumbling cedi. The fiscal problems have taken the shine off an economy feted for five years of gross domestic product growth above 8 percent on the back of its exports of gold, cocoa and oil.