The central bank in the coming days will issue onto the forex market a total of US$ 25 million, following the completion of the first FX forward auctions for the second quarter of 2020.
This follows the total commitment of US$ 225 million onto the Forex market in the first quarter of 2020.
According to the auction results published by the Bank of Ghana, bids submitted for the auction on April 07, 2020 amounted to US$ 78.75 million, but the Bank of Ghana accepted only US$ 25 million, which was the target for the auction.
The bids submitted were for the 7-day, 15-day, 30-day, 45 -day, 60-day and 75-day tenors. In total, 108 bids were submitted but only 38 of the bids were accepted by the BoG.
The central bank accepted a total of US$ 14.25 million for the 7-day bids. For the 15-day, 30-day and 45-day auctions a total of US$ 6.5 million, US$ 3.25 million and US$ 0.5 million were accepted, respectively. Bids totaling US$ 0.5 million were also accepted for the 60-day auctions.
Background
During the first quarter of 2020, the volumes offered at the forward FX auctions was increased by 60 percent over the initial auction conducted in October 2019, meant to help contain the increased demand for those currencies within that period of the year.
The intent behind the front-loading of the auctions in this quarter, a total of US$ 225 million, was to help narrow the gap between peak demand and supply of FX in order to reduce the pressure that relatively high demand for FX poses to the cedi in the first quarter.
However, the calendar shows that the central bank will maintain the amount to be sold per month at US$ 50 million for the rest of the quarters – bringing the total target for 2020 to US$ 715 million, according to the year’s FX forward sales auction calendar.
