The Bank of Ghana (BoG) has directed commercial banks to maintain cash reserves in the same currency as customer deposits, effective June 5, 2025, revising its Dynamic Cash Reserve Ratio (CRR) framework to mitigate currency mismatches and enhance monetary policy efficiency.
The move, announced after the May 2025 Monetary Policy Committee (MPC) meeting, aligns with efforts to stabilize the financial sector amid lingering inflationary risks, as the benchmark policy rate remains unchanged at 28%.
Under the new policy, foreign currency deposits must be backed by foreign reserves, while cedi deposits require cedi reserves. This replaces the previous mandate for all reserves to be held in local currency—a practice banks criticized for inflating operational costs and restricting financial intermediation. Governor Dr. Johnson Asiama stated, “This adjustment minimizes balance sheet risks and supports macroeconomic stability by aligning reserve holdings with deposit currencies.”
The MPC’s decision to hold the policy rate reflects cautious optimism, with inflation easing to 21.2% in April 2025 but still exceeding medium-term targets. “Tight monetary policy, fiscal consolidation, and exchange rate stability are driving disinflation,” Dr. Asiama noted, projecting inflation to fall faster toward single digits by early 2026 barring external shocks.
Analysts warn the policy shift may strain banks with significant foreign liabilities but applaud its long-term risk-reduction benefits. “Currency mismatches have long destabilized liquidity management. This reform addresses systemic vulnerabilities,” said financial strategist Nana Yaa Mensah.
The BoG’s dual focus—curbing inflation and fortifying financial resilience—underscores its balancing act in navigating Ghana’s recovery amid global economic headwinds.
