Companies warned not to price in foreign currency
The
Bank of Ghana, (BoG), has warned companies, institutions and individuals to
desist from pricing their goods and services in foreign currency.
Pricing
of good service in foreign currencies usually exerts some pressure of the local
currency, the cedi which resulting in shard depreciation.
According
to a statement issued by the BoG and signed on behalf of the Secretary to the
Bank, Ms Alethea Godson-Amamoo “the Foreign Exchange Act, 2006 (Act 723)
prohibits the pricing, advertising and receipt or payment for goods and
services in foreign currency in Ghana”.
The
statement explained that such violations are punishable by summary conviction,
a fine of up to seven hundred penalty units or a prison term of not more than
eighteen months, or both.
The
statement reiterated that the sole legal tender in Ghana is the Ghana Cedi and
Ghana pesewa.
The
statement comes in the wake of some companies, institutions and individuals
dealing in the business of foreign exchange without authorization from the
Bank.
The
Ghana Cedi was relatively stable against the major trading currencies reflecting
stability in the macroeconomic environment and increased foreign exchange
inflows. In the year to June 2019, the Ghana Cedi cumulatively depreciated by
8.4 percent, compared with 2.4 percent depreciation over the comparative period
in June 2018.
However,
against the other major currencies, the depreciation was relatively lower.
Against the British pound and Euro, the Ghana Cedi cumulatively depreciated by
7.6 and 7.9 percent respectively, compared with 0.02 percent depreciation
against the Pound and 0.3 percent appreciation against the Euro over the same
corresponding periods.
In
the outlook, the local currency is expected to remain broadly stable supported
by the accommodative policy stance of central banks in the advanced economies
and increased foreign inflows.
On a year-to-date basis, the cedi depreciated
by 8.4 percent and 9.0 percent in nominal trade and forex transactions weighted
terms respectively, compared to 0.03 percent and 2.2 percent depreciation over
the same period in 2018.
In
real terms, the cedi depreciated by 3.5, 2.3 and 0.8 percent against the US
dollar, the pound sterling and the Euro respectively, on a year-to-date basis.
In real trade weighted terms, the Cedi depreciated by 0.79 percent, but
appreciated by 5.5 percent in forex transaction weighted terms.
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