BoG fines, suspends forex licenses of Fidelity and FNB

The Bank of Ghana has temporarily suspended the foreign exchange (forex) licenses of Fidelity Bank and First National Bank (FNB) for flouting forex regulations in the country.

In a public notice, the central bank said the license suspension is for one month – from Thursday, June 29 to July 28, 2023.

The two banks have also been fined 1000 penalty units each for the offence. One penalty unit is GHS12, so 1000 penalty units is GHS12,000.

BoG said the two banks breached sections 3.4, 3.5, and 3.9 of the Ghana Interbank Forex Market Conduct rules.

Section 3 of the Ghana Interbank Forex Market Conduct is on Market Rules. Sub-section 3.4 is on Indicative Quotes; 3.5 is on Trade Reporting on Platforms; while 3.9 is on Fixing of Official Exchange Rate.

Here is what the specific laws said:

3.4 Indicative Quotes
Licensed Foreign Exchange Dealers (LFXDs) are required to update indicative quotes for buying and selling US dollars at regular intervals, on the Reuters and Bloomberg information systems. Indicative quotes shall be updated at intervals of no more than 30 minutes. (This will show the price at which a market-maker is prepared to buy and sell at the minimum traded lots).

3.5 Trade Reporting on Platforms
All interbank Foreign Exchange (FX) trades must be booked on the Reuters platform and appropriately confirmed within five (5) minutes after the trade is concluded. These trades must also be reported in the daily FX report submitted to the Bank of Ghana.

3.9 Fixing of the Official Exchange Rate
The Bank of Ghana shall publish the Ghana Cedi reference rate with respect to the US dollar on the Bank of Ghana website by 16:30 hours GMT daily except on holidays. The reference rate shall be computed using the weighted average exchange rate of all eligible US dollar transactions that are reported to the Bank of Ghana by the cut-off time of 15:30 hours GMT. The Bid and Offer reference rates are calculated by taking a +/- 0.05% bid/ask spread around the weighted average exchange rate

“By this notice, we caution forex market players including banks, forex bureaus, forex brokers, and money transfer operators (MTOs) to adhere strictly to the applicable forex market regulations and guidelines,” BoG said.

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