The Bank of Ghana (BoG) will issue a total of US$50 million on to the forex market in the coming days, following the completion of FX forward auctions in the first month of the second half of 2020.
This follows a total commitment of $400 million to the forex market for the first half of 2020.
Bids submitted for this auction in July 2020 amounted to $135.5 million but the Bank of Ghana accepted only $50 million, which was the month’s target for the auction.
The bids submitted were for seven-day, 15-day, 30-day, 45-day, 60-day and 75-day tenors. In total, 175 bids were submitted but only 87 were accepted by the Bank of Ghana (BoG).
The central bank accepted a total of $20.25 million for the seven-day bids. For the 15-day, 30-day and 45-day auctions, totals of $16.25 million, $10 million and $2 million were accepted.
Bids totalling $1 million and $0.5 million were accepted for the 60-day and 75-day auctions.
Repo facility
In May this year, the BoG announced that it had engaged the US Federal Reserve for a $1 billion repurchase agreement (repo) facility designed 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 US dollar by about 2.55%, and 7.07% against the euro, as well as by 0.63% against the pound sterling.
According to the 2020 FX forward sales auction calendar, the Bank of Ghana will maintain the amount to be sold per month at $50 million in each of the quarters – bringing the total target for 2020 to $715 million.
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