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Press Release
Kwaku Kwarteng
From Member of Parliament
Obuasi West Constituency
5th September 2014
GOVERNOR
BANK OF GHANA
ONE THORPE ROAD
ACCRA
IMPLICATIONS OF THE
IRREGULAR INTERBANK EXCHANGE RATE FIGURES BEING PUT
OUT BY THE BANK OF GHANA
I write respectfully to draw the Bank of Ghana's
attention to the implications of theirregular
currency and exchange rate practices being
perpetrated by the Bank of Ghana.
Since 11th July 2014, the Bank of Ghana has been
publishing interbank foreign exchange rates that
deviate drastically from the official rates quoted
by Ghanaian banks and rates prevailing in the
Ghanaian currency market. Consequently, per the Bank
of Ghana figures, the Cedi has remained quite stable
in the last three months while it has depreciated
significantly in Ghana's foreign exchange market.
On 20th August 2014 for instance, the Bank of Ghana
published the selling rate for the United States
Dollar as GH¢3.03. But on that day, the country's
major banks including the Ghana Commercial Bank,
National Investment Bank, Agricultural Development
Bank, Barclays Bank, Ecobank, Standard Chartered
Bank, Prudential Bank, Cal Bank, Access Bank,
Unibank, Access Bank, Royal Bank, SGS, UBA all
quoted rates in the close neighbourhood of GH¢3.80
to the US Dollar.
It is worth noting that international exchange rate
information sources such as Bloomberg, XE, Yahoo
Finance, Oanda, all published rates in the close
neighbourhood of GH¢3.80 to the US Dollar, which
reflected official currency prices in our Ghanaian
banks and in the Ghanaian currency market.
Governor, the interbank foreign exchange rates the
Bank of Ghana is currently publishing are not just
irregular, they are also illegal. The conduct of the
Bank of Ghana constitutes "Multiple Currency
Practice". It is, and has to be taken as a serious
development that could border on fraudulent
manipulation of exchange rates, with potentially
damaging consequences for our international
reputation. Also, this situation could create
problems in our economy.
For instance, the National Petroleum Authority (NPA)
determines fuel prices on the basis of Bank of
Ghana's exchange rate figures. This means, importers
of petroleum products who officially get their
foreign currency from our commercial banks at market
exchange rates (not Bank of Ghana exchange rates) to
pay for their imports incur serious and unfair
losses when they, as the law requires, sell their
fuel at NPA prices. This hurts our downstream
petroleum industry and could create fuel shortages
with its attendant impact on livelihoods and general
standards of living.
Again, cocoa farmers who are paid cocoa producer
prices determined with Bank of Ghana's exchange
rates are cheated because our cocoa farmers buy
imported items from the market at prices based on
market exchange rates (not on Bank of Ghana exchange
rates). There are countless such harmful cases in
the economy.
Governor, it has to be remembered that
discriminatory or multiple currency practices also
offend our Articles of Agreement with international
finance institutions, and could attract punitive
measures which would damage our international
reputation and have consequences for investor
confidence in our economy.
As the regulator of Ghana's banking industry
required to instill sanity in our monetary system,
this conduct by the Bank is extremely worrying. The
Bank is opening the gate for the intervention of
Parliament or the law courts. But intervention by
such state institutions in such an operational
matter will compromise your independence as a
central bank. It is for this reason that I write to
the Bank, in the hope that you will take immediate
steps to correct this irregular currency practice.
Sincerely,
Kwaku Kwarteng
Member of Parliament's Finance Committee
cc: Speaker of Parliament |
