Bank of Ghana relaxes foreign exchange controls

By Dasmani Laary
Posted on Monday, 16 June 2014 09:24

The Bank of Ghana (BoG) unveiled the measures last Friday following a public outcry over the banning of commercial banks and other financial houses from issuing cheques and cheque books for foreign currency accounts holders.

The earlier measures limited access to foreign exchange and restricted local trade transactions to the cedi

BoG had also directed that no bank should grant a foreign currency-denominated loan or foreign currency-linked facility to a customer who is not a foreign exchange earner.

It also prohibited offshore deals by resident companies, including exporters in the country.

BoG’s head of financial stability Benjamin Amoah, told journalist the new measures were introduced “after a thorough review of the controls introduced to halt the falling cedi.”

“The earlier measures limited access to foreign exchange and restricted local trade transactions to the cedi resulting in some challenges to the banks and restricting customers,” he said.

Local banks had complained bitterly that the BoG directives slowed down deposits into foreign currency accounts.

The banks said inflows from foreign exchange deposits from the Diaspora had also dwindled due to the unwillingness of exporters to transfer their proceeds.

The latest directive would now permit foreign currency account holders to withdraw up to $10,000 without prior proof of foreign travel.

The threshold for transfers abroad without submitting documentation has also been increased from $25,000 to $50,000.

In cases where documentation for a transfer remains outstanding, any subsequent import transaction by the importer, irrespective of the value, can only be made on prior provision of documentation required for the current transaction.

Under the current regulations, foreign exchange and foreign currency account holders are allowed a maximum withdrawal of the equivalent of $10,000 for travel abroad, which was subject to the provision of documentation for transfers outside Ghana.

The review also permits exporters of goods, and businesses, involving hotels and educational institutions, to quote their prices in Ghana cedis, but could receive payment in foreign currency from non-residents.

The 60-day mandatory repatriation of export proceeds has also been reversed and aligned to the terms agreed between trading parties.

A five day mandatory conversion of export receipts into Ghana cedis was also reversed, allowing exporters to now retain up to 60 per cent of their export receipts in their foregn exchange accounts, and the remaining 40 per cent converted at market rates within 15 working days.

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