Johnson Asiama defends new foreign exchange directives

Governor of the Bank of Ghana (BoG), Dr. Johnson Pandit Asiama, has defended newly issued foreign exchange directives aimed at strengthening market discipline and stability.

He addressed members of the UK-Ghana Chamber of Commerce during a meeting at the central bank’s headquarters in Accra on Monday.

Dr. Asiama said the guidelines, issued under the Foreign Exchange Act, 2006 (Act 723), are intended “to streamline foreign exchange market operations, improve transparency and compliance, as well as reinforce macroeconomic stability.”

“The foreign exchange directives constitute an important part of a broader policy framework that is aimed at deepening market discipline, ensuring efficient foreign exchange management, and creating a predictable environment for trade and investment,” he said.

He emphasised that businesses are key partners in policy implementation.

“Businesses are not merely passive recipient of monetary policy impulses but crucial actors who, in turn, shape monetary policy decisions,” he stated.

Dr Asiama pointed to improving economic indicators as evidence that recent policies are yielding results.

He noted that inflation has dropped sharply in recent months, while business and consumer confidence have strengthened.

“The evidence of these policy impacts is palpable – real sector activities have rebounded, business and consumer confidence have improved considerably, and inflation has declined sharply,” he indicated.

Meanwhile, under Ghana’s foreign exchange framework, the Bank of Ghana is mandated by law to regulate how foreign currencies are used in the country to protect the Cedi and ensure stability. The law requires that goods and services in Ghana be priced and paid for in Cedis, as it remains the only legal tender.

Businesses are generally not permitted to advertise or invoice in foreign currencies, except in limited cases involving non-residents.

In addition, travellers are allowed to carry up to 10,000 US dollars, or its equivalent, in cash without declaring it. Any amount above that must be declared at the point of entry or exit.

Only licensed institutions are permitted to trade in foreign currency, while holders of foreign exchange and foreign currency accounts are allowed to withdraw funds in line with existing rules.

The central bank maintains that these measures are designed to promote transparency and protect the local currency.