BoG commits US$50 million onto FX market in July

The central bank in the coming days will issue onto the forex market a total of US$ 50 million, following the completion of FX forward auctions in the first month of the second half of 2020.

This follows on a total commitment of US$ 400 million onto the forex market in the first half of 2020.

Bids submitted for this auction in July, 2020 amounted to US$ 135.50 million, but the Bank of Ghana accepted only US$ 50 million, which was the target for the auction in the month.

The bids submitted were for the 7-day, 15-day, 30-day, 45 -day, 60-day and 75-day tenors. In total, 175 bids were submitted but only 87 of the bids were accepted by the BoG.

The central bank accepted a total of US$ 20.25 million for the 7-day bids. For the 15-day, 30-day and 45-day auctions a total of US$ 16.25 million, US$ 10 million and US$ 2 million were accepted, respectively. Bids totaling US$ 1 million and US$0.5 million were accepted for the 60-day and 75-day auctions.

In May, 2020, the BoG announced that it had engaged the U.S. Federal Reserve for a US$ 1 billion repurchase agreement (REPO) facility for Foreign and International Monetary Authorities. The facility is expected to be available for at least six months, providing an important foreign exchange buffer to boost dollar liquidity amid the COVID-19 global pandemic, as well as further enhancing the BoG’s dollar liquidity.

To date, the cedi has depreciated against the U.S. dollar by about 2.55 percent, and 7.07 percent against the Euro, as well as by 0.63 percent against the Pound Sterling.

Background

According to the 2020 FX forward sales auction calendar, the central bank will maintain the amount to be sold per month at US$ 50 million in each of the quarters – bringing the total target for 2020 to US$ 715 million.