Sunday, September 15, 2019
Home BUSINESS Bank of Ghana prohibits the use of foreign currency for local transactions

Bank of Ghana prohibits the use of foreign currency for local transactions

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In a press statement, the BoG stated that it will punish anybody who does not use the Ghana cedi as a medium of payment in the country when caught.

The Central Bank said although the Foreign Exchange Act, 2006 (Act 723) prohibited the pricing and payment in currencies other than the local currency, it had noticed that some institutions, companies, and individuals were dealing in the “business of foreign exchange trade without authorisation from the bank.”

“The general public is hereby reminded that the Foreign Exchange Act, 2006 (Act 723) prohibits the pricing, advertising, receipt or payment for goods and services in foreign currency in Ghana.”

“Such violations are punishable by law by summary convictions, a fine of up to seven penalty units or a prison term of not more than 18 months, or both,” the statement, which was signed for the Secretary of the bank, said.

It added that “the sole legal tender in Ghana is the Ghana cedi or Ghana pesewas.”

The warning from the central bank is coming at a time when most companies are charging in dollars for their services.

The biggest culprits of the ‘dollarisation’ in the country include automobile companies, hotels, and multinationals.

These culprits often state the cost of their services in dollars. If you have to pay in cedis then you are expected to pay in cedi equivalent.

Experts have often cited the instability of the cedi as bases to resort to dollarisation, which is seen as a hedge against depreciation.

This is not the first time BoG is issuing such directive. It, therefore, makes it unclear how the Central Bank will ensure this is adhered to.