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The Bank of Ghana (BoG) has recently taken significant measures against Fidelity Bank Ghana Limited and First National Bank Ghana Limited for their violations of the rules governing the Ghana Interbank Forex Market.
As a result, the BoG has suspended the forex licenses of both banks and imposed fines on them. A press statement signed by Sandra Thompson, the Secretary of the BoG, outlined the details of the disciplinary actions taken.
According to the statement, Fidelity Bank Ghana Limited and First National Bank Ghana Limited will be prohibited from engaging in any forex transactions for a specific period. The suspension will be in effect from June 29th, 2023, until July 28th, 2023. This penalty serves as a consequence for their non-compliance with the regulations set forth by the Ghana Interbank Forex Market.
Furthermore, the two banks have each been fined 1000 penalty points for breaching sections 3.4, 3.5, and 3.9 of the Ghana Interbank Forex Market Conduct. These sections encompass crucial guidelines that aim to maintain transparency and accountability within the forex market.
Section 3.4 stipulates that Licensed Forex Dealers (LFXDs) are required to update indicative quotes for buying and selling US dollars at regular intervals on renowned information systems such as Reuters and Bloomberg. These indicative quotes must be updated no less frequently than every 30 minutes. The purpose of this requirement is to ensure that market-makers provide accurate and up-to-date pricing information for market participants.
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Section 3.5 focuses on the booking and reporting of interbank forex trades. It mandates that all such trades must be booked on the Reuters platform and confirmed within five minutes after the conclusion of the trade. Additionally, these trades must be included in the daily FX report submitted to the Bank of Ghana. By enforcing this regulation, the BoG aims to enhance transparency and promote the proper recording of interbank forex transactions.
Section 3.9 places the responsibility on the Bank of Ghana to publish the Ghana Cedi reference rate with respect to the US dollar on its official website by 16:30 hours GMT daily, except on holidays. The reference rate is calculated based on the weighted average exchange rate of eligible US dollar transactions reported to the Bank of Ghana by the cut-off time of 15:30 hours GMT. The bid and offer reference rates are derived by applying a bid/ask spread of +/- 0.05% around the weighted average exchange rate. To ensure transparency and accessibility, the reference rate is also published on Reuters and Bloomberg.
Fines and Suspension of Forex Licences of Fidelity Bank Ghana Limited and First National Bank Ghana Limited pic.twitter.com/WjGVpIeDme
— Bank of Ghana (@thebankofghana) June 29, 2023
In light of these violations, the Bank of Ghana has urged all forex market participants, including banks, forex bureaus, forex brokers, and money transfer operators, to strictly adhere to the applicable forex market regulations and guidelines. The central bank, as the regulator and supervisor of banking and non-banking financial institutions in Ghana, is committed to maintaining the stability and soundness of the financial system.
It is worth noting that the Bank of Ghana has recently intensified its efforts to combat illegal forex activities and safeguard the local currency. In May 2023, the bank revoked the licenses of five forex bureaus for various offenses, including operating without authorization, non-compliance with anti-money laundering requirements, and falsification of documents. The affected forex bureaus were Ocean Drive Forex Bureau, Kafsons Forex Bureau, Fatcoms Forex Bureau, Nabrim Forex Bureau, and Sears Forex Bureau.
The actions taken by the Bank of Ghana underscore its commitment to enforcing regulations and promoting integrity within the forex market. These measures aim to enhance transparency, protect market participants, and ensure the stability of the Ghanaian financial system as a whole.
