The Central Bank of Ghana (BoG) has issued a warning to the general public against the use of foreign currencies in local transactions, stating that it will punish anyone who is caught not using the Ghanaian Cedis or Pasewas as a medium of payment when doing transactions in the country.
In the press statement issued on its website, Dr. Ernest Addison, the Governor of the Ghanaian Central Bank said, “The general public is hereby reminded that the Foreign Exchange Act, 2006 (Act 723) prohibits the pricing, advertising and receipt or payment for goods and services in foreign currency in Ghana.”
“Such violations are punishable by summary conviction, a fine of up to seven hundred penalty units or a prison term of not more than eighteen months, or both.” The governor added.
“The sole legal tender in Ghana is the Ghana Cedi and Ghana pesewa,” the statement which was signed by the Secretary, Ms. Alethea Godson-Amamoo, said.
Analysts who have critically examined the press release argue that this is not the first time the apex bank will be issuing such a directive to the public. They said it is, however, unclear how the bank intends to ensure proper adherence to its cautions.
“The warning from the Central Bank is coming at a period when most companies are charging for their services in dollars. The companies that are majorly seen to charge in foreign currencies are the hotels, multinational corporations and the automobile companies,” analysts said.
Although, experts have often cited that the unsteadiness of the Ghana Cedi is the major reason for the act (now termed “dollarisation”), it is actually a hedge against depreciation of the national currency.
Foreign Currency Dominated Economy.
An economy where foreign currencies are used up for transactionary, speculative and precautionary motives is likely to be one with a weakened local currency. The foreign currency is a threat to the country’s local currency. Therefore, there is room for depreciation of the local medium of exchange.
The Central Bank Of Ghana.
The Bank of Ghana (BoG) was formally established on the 4th of March, 1957 by the Bank of Ghana Ordinance (No. 34) of 1957, and was passed by the British Parliament.
The bank commenced formal banking operations on the 1st of August, 1957, with the sole aim and objective to promote, by monetary measure, the stablisation of the value of the currency within and outside Ghana.
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