Commercial banks in Ghana will soon be required to hold reserves in the same currency as the deposits they receive.
This follows a key policy revision by the Bank of Ghana (BoG) under its Dynamic Cash Reserve Ratio (CRR) framework, aimed at strengthening financial stability and improving the transmission of monetary policy.
The new directive, which takes effect from June 5, 2025, means banks must now maintain foreign currency reserves for foreign currency deposits, and local currency (cedi) reserves for cedi-denominated deposits. Until now, banks were required to hold all reserves in Ghana cedis, a policy designed to tighten liquidity and rein in inflation.
This approach, however, has long been a concern for commercial banks, who argue that it creates currency mismatches on their balance sheets, increases operational costs, and constrains financial intermediation.
Announcing the change, Governor Dr. Johnson Asiama said: “The Committee decided to amend the Dynamic Cash Reserve Ratio (CRR) as follows: The CRR for all banks will now be maintained in their respective currencies.
This means foreign currency reserves for foreign currency deposits and domestic currency reserves for domestic currency deposits. This policy measure will become effective on June 5, 2025.”
The adjustment formed part of decisions taken at the Monetary Policy Committee’s (MPC) May 2025 meeting. At the same meeting, the Committee opted to maintain the benchmark policy rate at 28%, citing ongoing inflation risks despite recent improvements in macroeconomic indicators and exchange rate stability.
Dr. Asiama noted that while inflation is easing faster than previously projected, now expected to reach the medium-term target by the first quarter of 2026, current levels remain high.
“The latest forecast points to continued easing of inflationary pressures, supported by tight monetary policy, exchange rate stability, and fiscal consolidation.
However, the current level of inflation remains high relative to the medium-term target and will require maintaining the policy rate at 28.0%,” he explained.
The central bank believes that aligning reserves with deposit currencies will reduce foreign exchange exposure risks in the banking sector and promote long-term macroeconomic stability.
