Currency held by the public outside the banking system fell sharply in June 2025, dropping to GH₵58.1 billion from an average of just over GH₵62 billion in the first five months of the year, Bank of Ghana data show.
The June figure marks the lowest level since January and follows a stable run earlier in the year: GH₵62.6 billion in January, GH₵61.0 billion in February, GH₵62.0 billion in March, GH₵62.7 billion in April, and GH₵62.1 billion in May.
The decline suggests more money moved into the formal banking system or was withdrawn from circulation entirely. This shift is likely linked to the central bank’s tight monetary stance earlier in the year, with the policy rate held at 28% and liquidity management measures in place. In July, the Bank of Ghana cut the policy rate by 300 basis points to 25%, reflecting progress in controlling inflation.
Inflation slowed to 13.7% in June, the lowest since December 2021, and eased further to 12.1% in July, the lowest since October 2021. Lower inflation reduces the need for households and businesses to hold large amounts of cash, especially after the mid-year spending season.
Improved macroeconomic conditions have also played a role. Ghana’s foreign reserves strengthened in the first half of the year, and in June, the country’s sovereign credit rating was upgraded to B- with a stable outlook, boosting confidence in the banking system and making deposits more attractive than cash holdings.
The change in currency outside banks was mirrored by a steep fall in bank reserves at the central bank, down to GH₵46.8 billion in June from GH₵68.0 billion in May, after peaking at GH₵74.2 billion in April. This points to tighter liquidity in the financial system during that month.
With both households and banks adjusting their cash positions, June appears to mark a turning point in monetary conditions.
The July rate cut indicates the central bank is now shifting towards balancing inflation control with supporting credit growth and economic activity.
