The Bank of Ghana (BoG) has ordered banks to stop giving out foreign currency cash to large corporates unless the withdrawals are backed by equivalent deposits.
According to the central bank, it has become concerned about the increasing practice where companies, such as Bulk Oil Distribution Companies and mining firms, withdraw large amounts of foreign currency without first depositing cash in the same currency.
It said this practice puts pressure on the foreign exchange market and affects efforts to stabilize the cedi.
The new directive, which takes immediate effect, requires that banks only release foreign currency cash to companies if the funds are fully supported by prior deposits from the same institution.
Banks are also expected to keep proper records to prove the source of funds for every transaction.
The BoG assured that it remains committed to supporting large corporates because of their critical role in petroleum supply, mineral exports, and other key sectors of the economy.
It explained that, in partnership with the Government, measures have been put in place to provide enough foreign exchange liquidity to meet the genuine import needs of these companies.
The central bank warned that any bank that fails to comply with the directive will face regulatory sanctions. It also urged industry associations to inform their members and ensure they follow the directive.
By: Jacob Aggrey
