GRi BEF News - Ghana 14-07-2000

BOG urged to allocate more foreign currency to Forex

Accra (Greater Accra) 14 July 2000

Forex bureaux operators in Accra on Thursday said the current marginal gains of the cedi against major foreign currencies could be sustained if the Bank of Ghana (BOG) makes available promised allocations to the bureaux.

They said if the bank makes good its promise of further allocations to the forex bureaux, the current rates might stabilise or even fall.

The operators, who attributed the recent gains of the cedi to a 20,000-dollar allocation last week to each forex bureau, told the Ghana News Agency (GNA) that they anticipate a further decline if more allocations are made to them.

The cedi has nose-dived since the beginning of the year, necessitating broad policy measures by the government to help stabilise it.

It included a directive to forex bureau operators not to sell above 2,000 dollars to a client in a single transaction.

The operators have since called for the withdrawal of the directive, saying it was strangling their operations.

The dollar and the pound were until last week Monday being bought and sold at between 6,000 and 6,300 cedis and 9,000 and 9,400 cedis respectively.

They are now being quoted between 5,700 and 6,000 cedis and 8,600 and 9,000.

The operators claimed that business has not been brisk since the slump in the rates since most customers who have dollars to exchange do not find the rates attractive enough.

They accused commercial banks and operators in the parallel markets of quoting rates that are higher than those prevailing in the Forex bureaux.

"Since people who have the foreign currencies prefer to have higher rates, they patronise them and we lose our clientele. If care is not taken, they will soon put us out of business," one operator complained.

A cross-section of traders the GNA spoke to said the gains were too small to result in any appreciable change in the general level of prices of goods in the short- run.

"We don't expect any price changes since we bought our goods when the rates were higher."

GRi…/