The Bank of Ghana (BoG) has sold a total of 20 million dollars in forex to 11 Bulk Oil Distributing Companies (BDCs) at the rate of 15.4725. The sale, which was held on January 29, is a forward contract that will be settled in 30 days. The rate of 15.4725 suggests a depreciation of 3% from the last auction in January 14 where BDCs sourced the dollar at 14.9441.

BDCs rely on these twice-monthly forex auctions for about 11% of their total forex needs for the purpose of importing fuel into the country. An increase in the rate at which they purchase forex on the market results in higher pump prices, as has been witnessed on the market in recent days.

January inflation came in at 23.5%, a weaker print riding largely on the back of non-food inflation. However with fuel prices rising, it is likely that inflation will remain stubbornly high.

Finance minister Cassiel Ato Forson will be delivering the 2025 budget in March and the market is watching eagerly for the fiscal measures he will implement as part of his government’s promise to reset the economy. Investors and consumers will be listening eagerly for what measures he plans to use to address the cost of living crisis of which high fuel prices are a component.