Tighten 'grey areas' in exchange rate system - Economist to BoG

Economist, Professor Peter Quartey, has recommended that the Bank of Ghana (BoG) roll out policies to seal some loopholes in the exchange rate system to slow down the Cedi depreciation rate.

According to him, Ghana has no track of foreign currency transactions unlike in most African countries where a form of identification is entered into their system before any exchange on foreign currency is done.

He said this paves way for ‘black market’ dealings to thrive especially when people can easily contact individual sellers who then delivers at their door step.

Prof. Quartey said, “We have others who buy foreign currency. We have no track of any transaction. In most African countries any time you exchange any foreign currency, you need to send an ID you need to enter into the system. But not in our case. Now it’s so easy. You need to make a phone call. Somebody comes on a motorbike and gives you foreign currency.”

Speaking at the 4th Economic and Business Breakfast Forum organized by the First National Bank (FNB), he lauded the directive from the Central Bank ordering Forex Bureaus and other financial institutions to keep records on all foreign transactions.

“No matter how much Bank of Ghana pumps into the system, there is a leakage. There is a way out. People take it out easily. If we are able to monitor and know where this demand pressure is coming, then we can fashion out policies to address them. These are some of the grey areas we need to tighten so that we are able to manage the exchange rate system.” He said.