The Bank of Ghana (BoG) has sold $20 million to Bulk Oil Distribution Companies (BDCs) at the exchange rate of GH¢16.3933 to US$1 in its latest auction, held on October 29, 2024. This marks a depreciation of 3.2% compared to the previous auction conducted on October 10, where the exchange rate was GH¢15.8682. The auction is a forward contract that will be settled in 30 days.

The range of bids submitted for this auction was between GH¢15.8682 and GH¢16.2500 but the auction was cleared at an exchange rate higher than the highest bid. This suggests that there is a lot of pressure on the Ghana cedi. The currency has depreciated by about 28% against the US dollar in 2024, significantly hampering the recovery of the domestic money market as consumers flock to holding US dollars. The BoG has launched a gold coin as an alternative store-of-value investment for investors sceptical of cedi-denominated investments.

The $20 million twice-monthly auctions provides hard currency for BDCs to import fuel, however, it falls far short of the $360 million they require each month. The excess demand for dollars is met by the open market which further places pressure on the exchange rate.