The Ghana Gold Board (GoldBod) has sold approximately US$125 million to commercial banks in its maiden foreign exchange auction under its new spot FX sales and intermediation framework.

JOYBUSINESS understands that the auction was conducted on Tuesday as part of efforts to strengthen transparency, fairness and regulatory compliance in the foreign exchange market.

The auction forms part of GoldBod’s plan to provide commercial banks with more predictable and transparent access to US dollars through its GoldBod GoFX platform.

$1bn FX Sales to Banks

GoldBod earlier announced plans to sell US$1 billion to commercial banks during the month to support stability in the foreign exchange market.

The GoldBod programme is expected to generate about US$1.5 billion in total.

Of this amount, US$1 billion will be sold to commercial banks, while the remaining US$500 million will be advanced to the Bank of Ghana to support the accumulation of foreign exchange reserves.

Twice-Weekly FX Sales

Under the new framework, GoldBod will conduct foreign exchange sales twice a week, on Tuesdays and Thursdays.

Participating banks will submit their requests during a designated sales window.

Where demand exceeds the available FX tranche, GoldBod said allocations will be made on a pro-rata basis to ensure a transparent and equitable distribution of the available foreign exchange.

Transactions will be settled on the same day.

The US dollar leg will be completed by 3:00pm, while the Ghana cedi leg will be completed by 4:00pm.

Measures to Prevent Speculation

GoldBod said participating banks will be required to declare that their requests are backed by actual unmet foreign exchange demand or evidence of a short position.

The banks will also be required to comply with Bank of Ghana regulations and directives.

The measures are intended to ensure that the facility responds to genuine market demand and is not used for speculative purposes.

BoG to Provide Regulatory Oversight

The programme will operate under the regulatory oversight of the Bank of Ghana.

GoldBod said the central bank will have real-time access to the GoldBod GoFX platform.

GoldBod will also submit transaction reports to the Bank of Ghana after each sale.

The GoFX platform provides electronic submission and allocation processing, as well as time-stamping, transaction histories and audit trails.

According to GoldBod, these features are designed to strengthen transparency, accountability and post-trade verification.

The details were provided at a meeting between GoldBod and commercial banks ahead of the rollout of the new Spot FX Sales and Intermediation Framework.

The framework is expected to provide authorised commercial banks with predictable and transparent access to US dollars through the GoldBod GoFX platform.