BoG’s forex clampdown necessary – Banking Expert

By Praisebell Rosemond Larbi

Banking consultant Dr Richmond Atuahene has pushed back against suggestions that the Bank of Ghana (BoG) is reacting out of panic with its latest clampdown on the foreign exchange and remittance markets.

Instead, he has described the measures as necessary interventions aimed at safeguarding the stability of the cedi and protecting the integrity of Ghana’s financial system.

His comments come amid increased scrutiny of policy steps being taken by the Central Bank at a time when the local currency has shown signs of reversing some of the hard-won gains made over recent months.

Analysts and market watchers have been particularly attentive to the BoG’s interventions, as the exchange rate continues to play a decisive role in shaping business confidence, inflationary trends and the broader economic outlook.

Last week, the BoG announced the suspension of the remittance partnerships of five money transfer operators: Taptap Send, Top Connect, Remit Choice, Send App and Afriex, for a one-month period.

The regulator also imposed a one-month suspension on the foreign exchange trading licence of United Bank for Africa (UBA) Ghana, citing what it described as regulatory breaches.

These decisions sparked conversations across the financial sector, with some commentators questioning whether the actions reflected a defensive response to emerging pressures on the currency.

Dr Atuahene, however, strongly disagreed with that interpretation.

According to him, remittance inflows constitute a critical source of foreign exchange that directly supports the stability of the cedi, and as such, it is within the mandate of the Central Bank to impose sanctions when licensed operators fail to comply with established regulations.

“It is not a panic reaction. Last year when they suspended CBG and Taptap Send, it wasn’t a panic reaction. At that time, a dollar was about GHS17 or GHS16, but today they have managed it down to GHS12 to a dollar, and people think it is panic. No. Every country, especially in the developing world or in emerging economies where remittances play a key role in the balance of payments, takes such measures. It is not panic,” he explained.

He added that drawing parallels with previous interventions should put to rest claims of panic, pointing out that regulatory enforcement has always been an essential component of maintaining a credible financial sector.

“Those saying the BoG is panicking, I don’t understand. Last year the previous government also undertook similar actions. Was that panic? No. Once an entity is licensed, there are rules, and there are sanctions for non-compliance. That is how the system works. So I do not subscribe to the panic argument,” Dr Atuahene told Accra-based Citi News.

Industry experts note that remittances contribute significantly to Ghana’s economy, often accounting for billions of dollars annually and serving as a steady source of foreign exchange.

The BoG’s vigilance, they argue, is therefore vital to prevent distortions, safeguard consumer confidence and ensure that inflows are properly channelled through legitimate avenues.

The Central Bank has meanwhile reiterated its caution to all participants in the foreign exchange and remittance sectors, reminding them of the need to strictly adhere to regulatory guidelines and operational standards.

The Bank emphasised that compliance will remain a non-negotiable requirement as it seeks to preserve financial stability and maintain confidence in the domestic currency.