![Editorial: BoG’s New Directive On Forex Transactions Is A Move In The Right Direction](http://ghheadlines.com/index.php/images/default.png)
Forex trading involves the exchange of currencies on the global market, making it one of the most accessible and liquid financial markets in the world. In the ever-evolving landscape of Forex trading, where currencies are bought and sold globally, understanding and implementing Forex compliance standards are not just prudent but they are imperative. The compliance standards help to ensure market fairness, protect against manipulation and is a legal requirement for forex trading globally.
The Bank of Ghana (BoG) on 1st August, 2024 implemented a significant new directive requiring all licensed forex bureaus to demand customer identification – either a Ghana Card or passport – before engaging in money exchange transactions. This move aligns with international best practices, aimed at ensuring transparency and regulatory compliance.
This is to enhance the BoG’s capacity to monitor and supervise forex bureau operations in accordance with the Foreign Exchange Act, 2006 (Act 723) and the Anti-Money Laundering Act, 2020 (Act 1044).
The Chronicle welcomes this directive as long overdue, towards enforcing compliance with Ghana’s foreign exchange laws. The central bank’s pledge, made two years ago, to enhance oversight through stringent customer identification and electronic receipts is now becoming a reality. This measure is expected to bolster transaction legitimacy, reduce fraud and mitigate the risks associated with identity theft.
The benefits of this policy are substantial. It will enable the BoG to monitor the flow of foreign currencies more effectively and stabilise the cedi’s value against major currencies – an ongoing economic challenge. By ensuring that forex transactions are conducted through authorised channels, the directive aims to reinforce financial sector integrity and transparency.
Nevertheless, The Chronicle would like to raise its concern over potential unintended consequences. There is a risk that this policy might inadvertently fuel the black market. Traders who value anonymity may turn to the illicit operators if they are apprehensive about how their personal data is handled.
Additionally, skepticism about data protection could drive more individuals to the unregulated sector, exacerbating existing issues. The persistent issue of illegal forex trading further underscores these concerns.
Just days before the new directive took effect, 13 individuals were arrested for engaging in unauthorised forex trading or black market. This follows a similar crackdown two years ago, when over 100 individuals were detained across various locations.
This raises questions about the effectiveness of current enforcement measures. Section 29 (1a) of the Foreign Exchange Act clearly states that unauthorised foreign exchange trading is punishable by substantial fines or imprisonment. The recurrence of arrests in the same areas suggests that existing legal frameworks may not be stringent enough.
If enforcement remains inconsistent, the black market may continue to thrive, despite the regulatory efforts.
In our view, while the BoG’s directive represents a positive advancement toward securing the forex market, it is crucial to address potential gaps in implementation and enforcement. The central bank must ensure robust measures are in place to prevent a surge in black market activities and safeguard personal data.
The public, in turn, must adhere to legal channels and avoid contributing to the underground economy. Balancing regulatory rigor with effective enforcement will be key to achieving the intended outcomes of this new policy.
The post Editorial: BoG’s New Directive On Forex Transactions Is A Move In The Right Direction appeared first on The Ghanaian Chronicle.
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