Banking analyst calls for telecom forex restrictions to strengthen cedi

Dr. Richmond Atuahene, a prominent Banking and Finance Analyst, has urged the Bank of Ghana (BoG) to restrict telecom companies from participating in foreign exchange (forex) trading.

He proposes this as a potential measure to curb the depreciation of the Ghanaian cedi.

In an interview on Citi TV’s The Point of View with Bernard Avle, Dr. Atuahene raised concerns about the dominance of telecom companies in remittance services. He argued that their electronic forex payment systems contribute to the cedi’s weakening position.

Dr. Atuahene highlighted the recently enacted Payment Service System Act, which he believes grants excessive power to telecom companies in the financial sector.

He further argued that the Act might contradict the Foreign Exchange Act by allowing money transfer companies and Money Transfer Corporations (MTCs) to hold foreign currencies, potentially undermining central bank regulations.

The analyst urged the government and the Central Bank to revisit the Payment Service System Act. He believes revisions are necessary to safeguard the cedi and ensure a more stable financial environment.

“Remittances, it’s not only the fintech, some newly licensed MTCs, money transfer companies, are still holding foreign currencies. That one I think BoG should revisit it, because it is in breach of the Foreign Exchange Act (723), 2006.

“Someone came into this country for telecommunication, now they are major players in remittances. And we all know it, these [things] are affecting the depreciation of the cedi. This is my short- and medium-term approach, government should sit up and let us revisit it, so that we can hold the cedi that is running.”

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