The Bank of Ghana has launched a key technological intervention in Ghana’s interbank FX market aimed to reinforce macroeconomic stability and create the needed conducive environment for economic growth.
The Refinitiv Matching for Foreign Exchange (FX) platform is expected to help improve price discovery and transparency through real-time access to live prices for onshore and offshore stakeholders in the Ghana interbank FX market and deliver clear surveillance for Bank of Ghana.
Over the years, FX trading in Ghana has primarily occurred in over-the counter (OTC) markets, where relationship trading plays a vital role in the dealer-to-client and interdealer markets for accessing liquidity and managing risk.
Dr Ernest Addison, BoG Governor, who launched the platform, said as the Ghanaian FX market evolved, it was important to embrace international best practices and standard interbank trading conventions that would position Ghana as a preferred destination for investor equity and portfolio flows in Africa.
“This platform will also provide efficient execution of FX trades with no last look and counterparties will be screened for credit, thereby encouraging genuine interest to trade and client confidence,” he said.
“I expect this platform to play an effective role in further transforming the interbank market into a deeper, liquid and a more efficient one, which will in turn effectively support the central bank’s mandate of price stability,” he said.
The application will provide concentrated liquidity due to its all-to-all firm and aggregated liquidity as there is a single order book. Finally, all market data obtained from this platform will be a true reflection of market dynamics and it will eliminate duplicity of foreign currency demand from banks and their customers.
Dr Addison said the implementation of standard trading lot Sizes (in multiples of $250,000 or more), bi-lateral credit lines and a closed order book will help support efforts to deepen the market’s liquidity, ensure greater volumes, and reduce execution and operational risks.
The platform, which goes live on Friday 21st February, 2020, will be mandatory for all banks on the Ghana interbank market to use the platform for all their firm dealings of lot sizes in multiples of $250,000 or more.
“The adoption of this platform is a key step for deepening the local FX market and we therefore expect full adoption from every bank. The Bank would in the future approve granting functionality permission on this platform to other relevant stakeholders such as the Bulk Oil Distribution companies (BDCs) and mining firms that the Bank of Ghana considers important in the foreign exchange market,” Dr Addison said.
Refinitiv Matching is a leading industry solution that offers real-time credit screening, easy price discovery, concentrated liquidity and efficient execution for FX traders.
Nadim Najjar, Managing Director for the Middle East and Africa at Refinitiv said: “We are excited to be launching Refinitiv Matching one of the leading anonymous electronic matching services available in the global FX marketplace, in West Africa.
This collaboration between Refinitiv and the Bank of Ghana and local banks marks a key milestone in automating and digitising FX trading workflows.”