Arbitrage Opportunities on the Forex Bureau Market in Ghana.

Abstract

The liberalization of currency sales in February 1988 has brought into being many "Bureau of Change" (popularly known as "Forex Bureau") onto the foreign exchange market of Ghana. Do these bureaus set the same prices? If they do, there is no possibility of arbitrage. If they do not, then there could be the possibility of arbitrage which market participants can take advantage of. This paper looks at the extent of arbitrage going on in the Forex bureau market of Ghana in the three cities of Accra; Kumasi, and Takoradi. The currencies of interest are the United States dollar, the British pound, and the CFA franc which together form slightly more than ninety percent of the Forex bureau market of Ghana