Ghana's central bank to encourage use of Chinese yuan

ACCRA - Ghana's central bank said on Friday it was collaborating with banks to encourage the use of currencies of trading partners, such as the Chinese yuan, as settlement currency.

Benjamin Amoah, head of Stability at the Bank of Ghana (BOG), told the media at a press conference this was part of new measures governing the operations of foreign exchange and currency accounts in the country.

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"We are going to encourage the use of currencies of Ghana's major trading partners, such as the Chinese yuan, which is already available in Ghana, instead of the use of the US dollar, as the sole settlement currency," he stressed.

The new measures, Amoah said, came after an analysis of the available data on developments in the cedi/dollar exchange rate, foreign currency deposits as well as remittances, which showed that some policies had constrained the businesses of exporters and importers.

The BOG introduced new rules on Feb 4, to streamline the operations of foreign exchange and foreign currency accounts and bring about clarity and transparency in their operations.

Ghana's central bank hinted last year it mulled introducing the Chinese currency into the local FX market as the demand for that currency had been rising.

The bank's latest decision comes just few weeks after a top African regional banking official recommended the introduction of the Chinese currency, the renminbi, into the Ghanaian foreign exchange market.

Albert Essien, Group Chief Executive Officer (CEO) of regional bank, Ecobank Transnational Incorporated (ETI), said the introduction of the yuan into the Ghanaian market would also "ease business transactions for Ghanaian traders who do business with China and vice-versa."

"What it (introduction of the yuan) will do is to smoothen that kind of business interaction between Ghana and China, and there would be no third currency," the Group CEO pointed out in an exclusive interview with Xinhua recently.

He also suggested that the Bank of Ghana should look at other currencies to reduce its reliance on the dollar.