A banking consultant, Dr Richmond Atuahene, has welcomed the Bank of Ghana’s ban on the withdrawal of foreign currency by large corporates.

According to him, the Central Bank’s directive reinforces its earlier warning against the practice of transacting in foreign currencies in Ghana.

Banking Shake-Up: BoG says no more foreign cash for corporates without matching deposits

The Bank of Ghana announced an immediate ban on the withdrawal of large volumes of foreign currency by corporates, including Bulk Oil Distribution Companies, mining firms, and other large businesses, unless such withdrawals are backed by matching deposits.

The regulator noted that the practice puts avoidable pressure on the foreign exchange market and undermines efforts to stabilise the local currency.

Speaking exclusively to GhanaWeb Business’ Stella Dziedzorm Sogli, Dr Atuahene said, “I think it’s about enforcing the notice. You see, we don’t trade in dollars and pounds in Ghana, we deal with cedis. If you allow more people to withdraw dollars unchecked, the dollar could become the major trading currency in your country and eventually debase your own currency.”

The consultant explained that some companies were withdrawing foreign currency amounts beyond the balances in their foreign exchange accounts.

He noted that Bulk Oil Distribution Companies and others operate foreign exchange accounts into which they deposit forex, but in some cases, withdrawals were made without equivalent deposits.

“Normally, you pay physical dollars and withdraw physical dollars. But if you have a foreign currency account, you don’t just go to the bank and demand dollars because your account is a nostro. There is a holding balance in that account overseas. What businesses were doing was withdrawing funds they hadn’t actually deposited. What the Bank of Ghana is saying is simple, don’t withdraw foreign currency if you don’t have the deposits in your account. Don’t misuse your nostro account to access dollars,” Dr Atuahene explained.

SSD/MA