BoG sells $40m in third forward auction for 2020

The Bank of Ghana (BoG) has sold $40 million in its third forward forex auction for 2020.

This was contained in the Central Bank’s auction results released after its forward sale done on Tuesday, February 11, 2020.

Details of the auction results

The results showed that about 56 bids came through, totalling $51 million, however, the Central Bank decided to just accept 46 bids.

The highest bids came from dealers and bankers that were looking for $34 million and wanted to be supplied in seven days. They also submitted a maximum price or rate of GH¢5.34. But the Bank of Ghana just decided to accept 23 bids and offer them $22 million when the date is due.

For the 15 day Tenor, the banks and dealers did put in 18 bids, totalling $34 million. They were also looking forward to the Bank of Ghana selling to them at a maximum rate of GH¢5.41.

However, for these bids, the regulator decided to accept all their bids by agreeing to offer them all the $13 million requested. The regulator also agreed to accept a rate range of GH¢5.34 and GH¢5.41. The 30-day Tenor’s had all their request also granted. Four bids came in totalling $4 million with a rate range of GH¢5.37 and GH¢5.47.

Investors that were looking for dollars in 40 days, submitted just 1 bid, requesting $500, 000 at a maximum rate of GH¢5.

Forex Auction Target for 2020

According to the Bank of Ghana, it is planning to sell about $715 million for this year.

Results so far for this year have shown that on January 28, 2020, the Bank of Ghana sold, $40 million as against a target of $79.7 million. On January 14, 2020, about $88 million, however, the Central Bank agreed to sell $40 million.

Bank of Ghana on the Forex Auction sale

The Bank of Ghana has maintained the auction is meant to help businesses plan for their forex demands and help reduce the pressure spot market for forex in the country.

The Central Bank believes that this auction has also helped stabilize the Ghana cedi from last month of 2019 to date.

Managers of the auction have also rejected arguments they have failed in several circumstances to meet the demand of dealers and the commercial banks. But sources close to the Bank of Ghana have told JoyBusiness in most situations they had to reject some bids because it was not placed well, adding that it had nothing to do with the regulator not having enough forex to meet their demand.

Source: JoyBusiness

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