The Bank of Ghana (BoG) will from this Wednesday, November 30 start selling part of the $1.8 billion dollar cocoa loan to commercial banks.
The Central Bank to this end has released regulations for interested banks and the calendar to guide the auction.
The Bank of Ghana in a notice said only those who are licensed, can participate in the auction, “participation in the auction is restricted only to Authorized foreign Exchange dealing banks”.
It adds that authorise banks shall submit their bids via a secured Bank of Ghana page on Reuters Terminal or through a designated email in approved format provided by the regulator.
Participating banks are permitted to submit maximum three bids in the auction and quoting their desired amount, however, each bank will be allowed a minimum bid size of 500,000 and in multiples of 250,000.
A Maximum bid size of a single bid shall not exceed ten percent of the auction target, the cumulative volumes from any single bid shall not exceed 20 percent of the auction.
This should mean that no bank may get more 4 million dollars. According to the calendar, the Bank of Ghana is planning to sell 60 million dollars over the next four weeks.
The first auction will start on Wednesday, November 29 which will see the Central Bank auction $20 million. The second auction will take place on December 14 with the final one being done on $20 million.
The final auction will happen on December 28, 2016. However, some banks have told JOYBUSINESS that the amount being put out is not enough to meet their demands.
A source close to one the top banks in the country has told JOYBUSINESS that what the Bank of Ghana is planning to sell, will not even meet a quarter of their demands.
This is because there are more businesses looking for dollars to finance their imports for the first quarter of 2017. This has raised questions about whether, the auction will be enough to stabilize the Ghana cedi, which has witness some consistent drop in value marginally over the past four weeks.
But the Bank of Ghana, on the other hand, is challenging claims, arguing that apart from the auction of the cocoa loan, which will be done every quarter over the next 12 months, it is also working to introduce additional interbank interventions which actually started yesterday.
Some of the forex bureaus are selling 1 dollar at 4 Ghana cedis 20 pesewas whiles a commercial bank is likely to quote 4 Ghana cedi 15 pesewas.
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