Ghana’s central bank is increasing its monitoring of lenders’ foreign-exchange businesses to get them to adhere to policies as the institution looks for ways to support the local currency.
The Bank of Ghana suspended Access Bank Plc’s local unit from operating a foreign-exchange business for six months after it made illegal transfers of funds in dollars to Nigeria, Cynthia Abu-Bonsra, an official with the central bank’s banking supervision unit, said by phone today.
“Access Bank transferred amounts in excess of $10,000 without documentation on behalf of a client that was not its customer,” she said. “That action breached the foreign exchange law that requires documentation before transferring more than $10,000. It also contributes to capital flight that undermines the cedi.”
The central bank has been seeking ways to shore up the cedi, which has weakened 16 percent this year against the dollar. The currency traded 0.2 percent lower at 1.9575 by 12:17 p.m. in Accra, according to data compiled by Bloomberg. The bank has enacted policies to get lenders to increase reserves in cedis at the regulator and has boosted sales of Treasury bills to absorb the excess amounts of the local currency.
“Attempts to circumvent foreign-exchange laws are symptomatic of an ongoing lack of confidence in the cedi,” Sian Bradley, an analyst with Bath, U.K.-based Maplecroft, said in an e-mail. “The effective articulation and implementation of long-term structural reforms will be necessary in order to restore confidence in the cedi.”
Abu-Bonsra said the central bank received a tip about the alleged Access Bank transaction.
Nana Kyeremateng, Access Bank Ghana Ltd.’s deputy director of communications, said it would be “premature” to comment when reached by phone today. “We are still preparing a statement, which will be ready by the close of the day.”
The licenses of five foreign-exchange bureaus were revoked for failing to submit details on how they sold dollars, which had been earlier given to them by the central bank, Abu-Bonsra said.