Skip to main content

BoG sets Oct. 1 for Repo trading between banks


The Bank of Ghana (BoG) has set October 1, 2020 as the date when the trading of repurchasing agreements (Repos) between banks based on Global Master Repurchasing Agreement (GMRA) will go live in Ghana.

This comes after the launch of the Guidelines for Repos in Ghana, based on which trading will be carried out in accordance with the GMRA legal documents.

In a statement, the Central Bank is therefore urging all banks in the country to executive a GMRA with each other by September 15, 2020 in readiness for the opening of GMRA-based Repos trading on October 1.

It reminded the banks that “With effect from October 1, 2020, all Repo trading in Ghana shall be governed by the GMRA legal documentation,” adding, “All eligible Repo counterparties are to fully comply with the Guidelines for Repos in Ghana document, which is available on the BoG website.”

Read also: World Bank Group and IMF mobilize partners in the fight against COVID-19 in Africa

The Central Bank said Repo counterparties may use the appropriate systems to facilitate their conduct of GMRA-based Repos.

It also said the buyer of a Repo Security shall mark-to-market using Bloomberg as a pricing source, adding that, where Bloomberg does not price a Repo Security, the buyer and seller shall agree a price for the purpose.

The buyer shall apply a haircut at the initiation of the Repo transaction,” it said, warning that full close-out netting shall apply in the event of default.

GMRA is a model legal agreement designed for parties transacting Repos and is published by the International Capital Market Association (ICMA), which is the body representing the cross-border bond and repo markets in Europe.

The GMRA is the principal master agreement for cross-border repos globally, as well as for many domestic repo markets like the one to be done in Ghana on October 1.

Repo, on the other hand, is a form of short-term borrowing for dealers in government securities. A dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price.

For the party selling the security and agreeing to repurchase it in the future, it is a repo; for the party on the other end of the transaction, buying the security and agreeing to sell in the future, it is a reverse repurchase agreement.

Labels:

Comments

Post a Comment

Popular posts from this blog

Ghana Home Loans

With interest rates declining, a more liquid environment and a macroeconomic stability, mortgage financing is expected to see an ease of credit. And Ghana Home Loans being a leader in this industry is expected to lead the way. Ghana Home Loans (GHL), a leader in home mortgage, continues to be the frontier in fulfilling dreams of many Ghanaians in homeownership. Since starting business in 2006, it has also provided many existing homeowners with Equity Release mortgages to support their businesses, pay educational fees, improve their properties, or simply pursue other personal hobbies and interests. Ghana Home Loans is a mortgage finance institution which operates under Bank of Ghana’s supervision as a non-bank financial institution. At present, the Company remains the only such institution that focuses exclusively on the provision of mortgage product. Through the Home Completion mortgage and Home Construction mortgage products, Ghana Home Loans has enabled many qualified applican
16 comments
Read more

Zoomlion Advocates Community & Gender inclusive waste management for Climate Action at COP 29

 Africa's waste management giant, Zoomlion Ghana Limited has advocated for an integrated approach to waste management that considers the interest of community members, women and vulnerable groups. James Deku, a Communications Officer of Zoomlion Ghana Limited made this call at the 29th session of the Conference Of Parties (COP 29) of the United Nations Framework Convention for Climate Change (UNFCCC) at Azerbaijan, Baku whiles speaking on the topic "Community-Driven and Gender Inclusive approaches to waste management for Climate Action ". He said the waste sector is a major contributor of methane emissions which is a potent greenhouse gas causing climate change hence the need to manage waste in a manner that considers the interest of all stakeholders. Zoomlion's waste management model is designed and operated in a manner that considers the interest of all stakeholders. Through a Public Private Partnership (PPP) model, local authorities engage community members in clea
Post a Comment
Read more

Anglogold Ashanti Obuasi Mine tops 2024 Sustainability & Social Investment Awards

 AngloGold Ashanti Obuasi Mine has confirmed its status as sustainability champions by sweeping nine awards, the most won by a company at the 2024 Sustainability & Social Investment Awards (SSI) held at Movenpick Ambassador Hotel in Accra. The feat comes on the heels of a dominant performance in last year's event where AngloGold Ashanti Obuasi Mine swept seven awards. The SSI Awards organised by Ianmatsun Global Services recognizes the most outstanding sustainability, Corporate Social Responsibility (CSR), Environmental, social, and governance (ESG) initiatives in the country and beyond as well as the best teams and individuals who brought them to life. This year's event, which was the 8th edition, was under the theme "Climate Action Now: Accelerating Decarbonization and Building Resilience". The awards won by AngloGold Ashanti on the night include SSI Company of the Year, Best Company in Women Empowerment (project), SSI Company of the Year ( Environment), Best Co
Post a Comment
Read more