The Ghana Gold Board (GoldBod) has conducted its maiden foreign exchange auction, selling approximately $125 million to commercial banks. This auction, which took place on Tuesday, is part of GoldBod's efforts to provide commercial banks with more predictable and transparent access to US dollars through its GoldBod GoFX platform. The platform is designed to enhance transparency, fairness, and regulatory compliance in the foreign exchange market.
The auction is a key component of GoldBod's plan to sell $1 billion to commercial banks during the month, with the goal of supporting stability in the foreign exchange market. The GoldBod programme is expected to generate about $1.5 billion in total, with $1 billion to be sold to commercial banks and the remaining $500 million to be advanced to the Bank of Ghana to support the accumulation of foreign exchange reserves.
Under the new framework, GoldBod will conduct foreign exchange sales twice a week, on Tuesdays and Thursdays. Participating banks will submit their requests during a designated sales window. If demand exceeds the available FX tranche, allocations will be made on a pro-rata basis to ensure a transparent and equitable distribution of the available foreign exchange. Transactions will be settled on the same day, with the US dollar leg completed by 3:00 pm and the Ghana cedi leg by 4:00 pm.
To prevent speculation, participating banks are required to declare that their requests are backed by actual unmet foreign exchange demand or evidence of a short position. The banks must also comply with Bank of Ghana regulations and directives. These measures are intended to ensure that the facility responds to genuine market demand and is not used for speculative purposes.
The programme will operate under the regulatory oversight of the Bank of Ghana, which will have real-time access to the GoldBod GoFX platform. GoldBod will also submit transaction reports to the Bank of Ghana after each sale. The GoFX platform provides electronic submission and allocation processing, as well as time-stamping, transaction histories, and audit trails, designed to strengthen transparency, accountability, and post-trade verification.
According to GoldBod, the details of the programme were provided at a meeting between GoldBod and commercial banks ahead of the rollout of the new Spot FX Sales and Intermediation Framework. The framework is expected to provide authorised commercial banks with predictable and transparent access to US dollars through the GoldBod GoFX platform.
The GoldBod programme is a significant development in Ghana's foreign exchange market, aimed at enhancing transparency and regulatory compliance. With the Bank of Ghana providing regulatory oversight, the programme is expected to provide a stable source of foreign exchange for commercial banks, supporting economic growth and stability in the country.
Key points
- GoldBod sells $125m to commercial banks in its maiden foreign exchange auction.
- The programme aims to provide commercial banks with predictable and transparent access to US dollars.
- The Bank of Ghana will provide regulatory oversight of the programme.
