ACI Ghana, the national association of financial market professionals, has moved to assure participants and the public of the stability and integrity of the foreign exchange (FX) market.

This comes after the recent decision by the Bank of Ghana (BoG) to suspend the forex licenses of two member institutions – Fidelity Bank and First National Bank.

In a statement, Lawrence Osilaja Boampong, the President of ACI Ghana, acknowledged the concerns and anxieties arising from the developments, stating, “We understand the concerns and anxieties that this development may have raised among market participants and the public. We want to assure everyone that the stability and integrity of the foreign exchange (FX) market remain intact”.

He noted that the suspension does not imply any systemic issues within the interbank forex market specifically or the banking industry as a whole.

Mr. Boampong stressed that all member banks and financial institutions operate within the regulatory framework, maintaining robust risk management practices and adhering to ethical standards.

ACI Ghana also acknowledged the regulatory role of the BoG in ensuring transparency, accountability, and adherence to the highest standards within the financial sector. To address the issues at hand, ACI Ghana indicated that it has formed a committee dedicated to conducting a thorough investigation into the matter.

Mr. Boampong emphasized the committee’s diligence, stating, “The committee will diligently gather all the facts and engage with the concerned banks and the Bank of Ghana to address the issues and make appropriate recommendations.”

Offering further reassurance to stakeholders, including ACI Ghana’s esteemed members, of the association’s commitment to maintaining market integrity, upholding the highest ethical standards, and protecting their interests. He asserted, “Our primary objective is to ensure a fair and transparent financial market for all participants.”

During this critical period, ACI Ghana pleaded for caution and respect in discussions related to the matter, including on social media platforms. The association encourages the public to seek information from reliable sources and remain calm and confident in the overall strength and resilience of the FX market.

Its president highlighted the collaborative efforts with the Bank of Ghana and member institutions, stating, “We continue to collaborate closely with the Bank of Ghana and our member institutions to ensure a functioning, transparent, and well-regulated market.”

The regulator, last week, has taken punitive measures against Fidelity Bank Ghana Limited and First National Bank Ghana Limited for violating sections 3.4, 3.5, and 3.9 of the Ghana Interbank Forex Market Conduct rules. Both banks have been fined with a combined 1,000 penalty points each and have had their forex licenses suspended for a month – from June 29, 2023, to July 28, 2023.

These breaches highlight the banks’ disregard for crucial regulations governing the forex market. Section 3.4 requires licensed foreign exchange dealers to regularly update their indicative quotes for buying and selling US dollars on Reuters and Bloomberg information systems at intervals of no more than 30 minutes.

Section 3.5 mandates that all interbank FX trades be booked on the Reuters platform and confirmed within five minutes, with the trades reported in the daily FX report submitted to the Bank of Ghana. This ensures accurate record-keeping and enhances market oversight.

Lastly, section 3.9 outlines the procedure for calculating the cedi reference rate concerning the US dollar. The reference rate, published by the Bank of Ghana daily at 16:30 hours GMT, is determined using the weighted average exchange rate of eligible US dollar transactions.