The Bank of Ghana has, once again, cautioned the public against illegal dealings in foreign currency, which include illegal forex activities and pricing, advertising, receipting or making payments for goods and services.
The Bank in a statement in accordance with the Foreign Exchange Act, 2006 (Act 723) said companies, institutions and individuals are prohibited from engaging in foreign exchange business without a licence issued by it; as well as pricing, advertising, receipting or making payments for goods and services in foreign currency in Ghana without written authorisation from the Bank of Ghana.
“The Bank of Ghana hereby cautions the general public to desist from dealing in illegal forex activities (black market transactions), pricing, advertising, receipting or making payments for goods and services in foreign currency in Ghana without the requisite licence or authorisation from the Bank of Ghana.
“The Bank of Ghana, in collaboration with national security and law enforcement agencies, will continue to clamp down on illegal foreign exchange operations. All offenders shall be dealt with in accordance with the law. The general public is hereby notified that the sole legal tender in Ghana is the Ghana cedi,” the bank said.
Such violations, according to the central bank, are punishable on summary conviction by a fine of up to 700 penalty units or a term of imprisonment of not more than 18 months, or both.
The pricing of goods and services in foreign currency, especially the American greenback, has remained a cause of concern for the regulator – given the ripple-effects on local currency. The cedi weakened against its major trading currency, the US dollar, at about 15 percent in March 2022 ahead of the hike in policy rate and other measures announced by the central bank.
The real estate industry is widely known for quoting apartment prices in US dollars, which inevitably causes an increase in demand for the greenback – leading to depreciation of the local currency. Real estate market data, according to the global property guide, indicate that a 75 square metre (sq/m) apartment costs about US$200,000 and will rent for around US$1,750 per month, giving a gross rental yield of around 11 percent. Residential property prices are around US$2,200 per sq/m.
Additionally, greenback demand pressures from the corporate and energy sectors further weakened the Ghanaian cedi.
However, the effects of both fiscal and monetary measures outlined in recent weeks have seen some respite for the local currency against the US dollar. The cedi was broadly unchanged at -0.05 percent week on week (w/w) on the BoG interbank market, while it recorded a 1.01 percent w/w gain on the retail market, according to Apakan Securities Limited.