The Bank of Ghana (BoG) has issued a crucial directive requiring all commercial banks to maintain distinct reserves for their domestic currency and foreign currency deposits.
Effective June 5, 2025, banks must now hold domestic currency reserves specifically for cedi deposits and foreign currency reserves exclusively for foreign exchange (FX) deposits.
This policy is part of a broader set of five key regulatory measures aimed at promoting financial stability, fairness, and stronger market discipline across Ghana’s banking sector.
The new approach seeks to better align liquidity management practices with the underlying funding structures of banks, thereby enhancing discipline in the country’s foreign exchange market.
Speaking on the directive, the Bank of Ghana noted that the new Cash Reserve Ratio (CRR) requirement follows extensive internal deliberations and consultations with banking sector stakeholders.
This collaborative process allowed the central bank to address concerns related to the previous dynamic CRR regime and design a solution that balances effectiveness with the need to avoid excessive liquidity injection into the financial system.
“The transition to this new regime is critical for strengthening the resilience of our banking sector,” the BoG said.
“We trust the transition will proceed smoothly and encourage banks to provide operational feedback as implementation begins.”
This directive marks a significant step in the Bank of Ghana’s ongoing efforts to enhance liquidity management frameworks within Ghana’s financial institutions, with the ultimate goal of ensuring a more stable and efficient market for both local currency and foreign exchange transactions.
As the new CRR rules take effect, banks are expected to adjust their reserve management systems accordingly, thereby supporting the BoG’s mission to maintain a robust, fair, and transparent financial environment for all market participants.
