Bank of Ghana suspends FX trading licences of two Nigerian lenders

The Bank of Ghana has suspended the Foreign Exchange Trading Licences of Guaranty Trust Bank Ghana Limited (GTB) and FBNBank Ghana Limited (FBN).

The suspension takes effect from March 18, 2024 and it will last for a period of one month, in accordance with section 11 (2) of the Foreign Exchange Act 2006, (Act 723).

The suspension was announced in a press release by Ghana’s aoex bank dated March 4.

The suspension “is as a result of various breaches of the foreign exchange market regulations, including fraudulent documentation in their foreign exchange operations which have come to the attention of Bank of Ghana,” the bank said.

“The licence will be restored at the end of the one-month suspension period once the Bank of Ghana is satisfied that they have put in place effective controls to ensure strict adherence to the foreign exchange market regulations.”

The bank said it uses the statement to caution foreign exchange market players to adhere strictly to the applicable forex market regulations and guidelines.

The suspension is coming at a time Nigeria is reforming its FX terrain.

In January, the Central Bank of Nigeria (CBN) on said the Net Open Position (NOP) limit of banks’ overall foreign currency assets and liabilities both on and off-balance sheet should not exceed 20 percent short or 0 percent long of shareholders’ funds unimpaired by losses using the gross aggregate method.

The CBN gave the banks a deadline of February 1, 2024 to their positions to align with the new regulations.

Barely 24 hours after the regulation on February 1, pressure on Nigeria’s FX market eased a bit. Experts had attributted the relaxed pressure on activities of commercial banks offloading dollars into the official market in response to 24-hour deadline given by CBN.

The activities boosted the volume of dollar transactions by willing buyers and willing sellers, consisting of banks, exporters and investors by 85.36 percent. The daily FX market turnover for the day also increased to $134.07 million on from $72.33 million recorded the previous day at the official market.