A significant modification to its approach for managing liquidity – BoG

Compiled By: Prince Henry Danquah, Bora Capital Advisors Ltd

The Bank of Ghana has announced a major adjustment to its liquidity management framework, replacing the existing dynamic Cash Reserve Ratio regime with a uniform 20 per cent reserve requirement to be maintained in domestic currency by banks.

The measure, announced by Governor Dr Johnson Pandit Asiama after the 130th Monetary Policy Committee meeting, will take effect from June 4, 2026.

The decision came after the Committee maintained the policy rate at 14.0 per cent, signalling caution over emerging inflation risks from higher crude oil prices, renewed pressure on the cedi and uncertainty in the external environment.

Under the new framework, banks will be required to hold a uniform 20 per cent Cash Reserve Ratio in local currency, marking a shift away from the earlier dynamic framework that linked reserve requirements to banks’ loan-to-deposit positions.

Source: newsthemegh.com