Explainer: Why BoG is combating large companies from retreating bucks they in no way deposited – MyJoyOnline

Introduction

In August 2025, the Bank of Ghana (BoG) introduced a structural reform to tighten control over foreign exchange (forex) withdrawals, targeting large corporations that previously bypassed deposit requirements. This directive, spearheaded by Governor Dr. Johnson Asiama, aims to stabilize the cedi and curb speculative practices that had weakened the local currency. By mandating that firms withdraw only funds they’ve deposited, the BoG seeks to create a more resilient financial ecosystem. This article unpacks the rationale, implications, and global parallels of this controversial move, offering a roadmap for businesses navigating the new landscape.

Analysis

Curbing Speculative Withdrawals: A Strategic Imperative

Prior to the directive, several large companies exploited a loophole in Ghana’s banking system:

• Withdrawing forex without corresponding deposits
• Engaging in currency hoarding for speculative trading
• Shifting funds across accounts to avoid reserve requirements

These actions drained liquidity from banks, exacerbating cedi depreciation. For instance, a mining firm that deposited $100 could historically withdraw $500+ through cross-account transfers, destabilizing the currency peg. The BoG’s crackdown directly addresses this asymmetry, aligning withdrawals with verified deposits.

Protecting Cedi Stability: The Push-Pull Dynamics

The cedi’s journey from GH¢14.70 to the USD in January 2025 to a stabilized GH¢10.30–GH¢10.95 by mid-year underscores the central bank’s efforts. Key drivers include:

• Liquidity injections: $1.4 billion added to the financial system in Q1 2025 alone
• Gold exports: Buoyant prices (over $2,000/ounce) bolstered foreign reserves
• Remittance reinvigorated: $3.9 billion flowed into Ghana despite cedi appreciation costs

Critics argue that dollar pegging in public sector contracts perpetuates forex demand spikes, offsetting stabilization gains. The BoG faces a conundrum: encouraging industries to adopt UTIC transactions (Unit Transaction in Ghana Cédi) risks inflating costs, while liberal withdrawal policies invite arbitrage.

Clash of Interests: Business Concerns and Policy Realities

While the directive aims to plug speculative holes, companies like AngloGold Ashanti and Cargill, which rely on forex for imports, fear operational bottlenecks. Compliance challenges include:

• Reconfiguring banking partnerships to adhere to deposit-withdrawal parity
• Navigating delayed access to funds for just-in-time inventory needs
• Maintaining competitive edge amid potential currency conversion losses

Summary

The Bank of Ghana’s directive marks a pivotal shift in the nation’s forex governance. By institutionalizing deposit-withdrawal parity, the BoG aims to

Key Points