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BOG to close all foreign accounts
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- Category: Business & Finance
- Created on Friday, 08 June 2012 00:00
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BOG to close all foreign accounts
After serving notice of its intent to smoothen out fluctuations of the cedi against major international trading currencies, reports monitored indicate that the Bank of Ghana is considering the abolishing of foreign accounts held by individuals and companies in the country in a bid to halt the depreciation of the Cedi.If carried out, this would mean individuals and companies would not hold bank accounts either in US Dollars, Pounds or Euros in Ghana. Existing foreign accounts would be converted into cedi accounts if this is implemented.
The Bank of Ghana has since the beginning of the year circulated more than US$800 million dollars, as part of efforts to stem the free fall of the local currency, but the cedi is yet to stabilise. The Bank has already ordered that not more than $2,000 can be transferred from Ghana by an individual or a corporation.
Meanwhile, there are mixed opinions by financial analysts and economists on the considerations by the Bank of Ghana to abolish the holding of forex accounts in the country.
The head of Gold Coast Securities, Samuel Ampah, arguing in favour of the Central Bank’s considerations said, “We have had an issue in this country where everything is dollarized and that is not helping the economy at all so we should be trading in the local currency but if we entertain the attitude of holding or dollarizing every activity it goes a long way to affect or put pressure on the Cedi.
“When people hold dollars in their accounts it puts them in a situation where they always want to do transactions in foreign currencies or dollars. But I believe the point the Bank of Ghana is trying to make is that if we live in a country that our local currency is the Cedi, all transactions should be in Cedi”.
But a lecturer in Economic Securities, Ali Abdallah thinks otherwise. “If it is for their business transactions, and other purposes, then I wouldn’t see why you would restrict anybody from holding such an account.
I think that before you open a forex account there are forms you fill and questions about the need for that particular account you answer, so all the banks should help the Bank of Ghana and ensure that all those who want to open such accounts... for the purposes of their business and not for the sake of holding a foreign denominated accounts”
According to Citi Business News sources at the Central bank, Managing Directors of eight of the top banks in Ghana were assembled yesterday by the Bank of Ghana to deliberate on the consequences of abolishing forex accounts in Ghana.
The move if implemented, according to sources at the Bank of Ghana, will augment processes of mitigating the high levels of dollarization in the country. Dollarization is when individuals and companies use foreign currencies like the dollar for financial transactions and quotations of goods and services.
Source: The Newstatesmanonline
