Accra, Ghana - The Bank of Ghana says it would allow the foreign exchange market to operate freely, in spite of efforts to rehabilitate the ailing local currency, the cedi.

The apex bank, however, said in a statement that it would continue to enforce existing regulations and requirements for its smooth operation.

It said it has discontinued the practice of special swaps that had entailed reversible forex transactions with banks since the end of May.

Special swaps had been used by the bank to intervene in the forex market.

It reiterated that forex operators should seek the identity of those buying foreign currencies from them and to engage in spot buying only.

They should desist from accepting money against future supply and engaging in high volume sales and they should display their rates and submit their returns to the bank not later than 10 working days after the end of the month.

The bank said efforts are being made to improve the liquidity situation in the foreign exchange market to stabilise the rate of the cedi.

It said the country is expecting an in-flow of about 300 million US dollars in foreign assistance from multilateral and bilateral donors once IMF Board review of Ghana's economic programme is concluded later this month.

The public has expressed concern about the volatile foreign exchange market, which has seen the cedi crash from 3,500 to the dollar at the beginning of the year to more than 6,000 presently.

Finance Minister Kwame Peprah in April announced a series of measures to control the slump of the currency.