BOG to close all foreign accounts in Ghana

In a latest move by the Bank of Ghana to halt the depreciation of the Cedi as a long term measure, Citi Business News has learnt the Central Bank is considering abolishing the holding of forex or foreign accounts.

This would mean individuals and companies would not hold bank accounts either in US Dollars, Pounds or Euros in Ghana. Existing foreign accounts would be converted into cedi accounts if this is implemented.

According to Citi Business News sources at the Central bank, Managing Directors of eight of the top banks in Ghana have been assembled by the Bank of Ghana to deliberate on the consequences of abolishing forex accounts in Ghana.

The move if implemented will augment processes of mitigating the high levels of dollarization in the country. Dollarization is when individuals and companies use foreign currencies like the dollar for financial transactions and quotations of goods and services.

Citi Business News understands that the eight Bank Managing Directors are expected to share their expert opinion on the Bank of Ghana’s intentions and are expected to meet on Friday June 8 to deliberate on the matter.

Meanwhile there are mixed opinions by financial analysts and economists on considerations by the Bank of Ghana to abolish the holding of forex accounts in the country.

The head of Gold Coast Securities Samuel Ampah arguing in favour of the Central Bank’s considerations said, “We have had an issue in this country where everything is dollarized and that is not helping the economy at all so we should be trading in the local currency but if we entertain the attitude of holding or dollarizing every activity it goes a long way to affect or put pressure on the Cedi.

“When people hold dollars in their accounts it puts them in a situation where they always want to do transactions in foreign currencies or dollars. But I believe the point the Bank of Ghana is trying to make is that if we live in a country that our local currency is the Cedi, all transactions should be in Cedi”.

But a lecturer in Economic Securities, Lawyer Ali Abdallah thinks otherwise. “If it is for their business transactions, and other purposes, then I wouldn’t see why you would restrict anybody from holding such an account.

I think that before you open a forex account there are forms you fill and questions about the need for that particular account you answer so all the banks should help the Bank of Ghana and ensure that all those who want to open such accounts indeed them for the purposes of their business and not for the sake of holding a foreign denominated accounts”.**