Availability of hard currency in Ghana and Vietnam
Easy access to hard currency is essential to facilitate foreign trade and is useful in certain other circumstances for both local people and expatriates, but in both Ghana and Vietnam this facility was not available for several decades . In Ghana in the 1970s, foreign currency was only available to those who held an import licence, and the issuance of these scarce documents was limited to friends of the issuer and those willing to pay a significant premium. This situation continued until the intervention of the IMF in 1983 when the cedi was floated, and over the next decade or so a global level of convertibility was achieved. Similar progress was made in Vietnam starting in 1985, but the process is still ongoing and not all achievements have been preserved.
In the 1970s, exchanging Ghana cedis for another currency without an import license was legally impossible. The black market flourished and by 1982 the dollar to cedi exchange rate reached 120, while the official rate had remained unchanged since 1978 at 2.8 cedis to the dollar. Thus, the few who obtained an import license increased the value of their investment by almost 43 times. There was no way to withdraw hard currency in Ghana from a foreign bank account, so money could only be carried from outside or bought on the black market. Hard currencies: dollars or pounds sterling could be changed into cedis at the official exchange rate, but this involved very significant losses.
In 1983, with the launch of the Cedi exchange rate, a slow process of normalization began. In the early 1990s it became possible to open foreign currency accounts in local banks denominated in dollars or pounds. Around the same time, the first ATMs appeared in major cities and it became possible to withdraw local currency from local or foreign bank accounts. In 1997, a similar facility was opened in ATMs in Vietnam, and it was also possible to withdraw USD cash from overseas accounts up to a maximum of $400 per day. By 2014, however, this facility had been retired.
People with cedi bank accounts in Ghana can make transfers abroad to foreign currency accounts for any purpose: business or personal. Bank account holders in Vietnam do not enjoy this facility, although special arrangements may be made for medical or educational purposes. It is also possible for these accounts to receive transfers from foreign bank accounts. Imports are controlled by something like the old Ghana import license system, although the currency available is much larger and licenses more plentiful. Ghana now has a financial system adapted to the needs of the global free market, but for Vietnam, achieving this goal is still a work in progress.
#Availability #hard #currency #Ghana #Vietnam