BoG tells banks to match reserves with deposit currencies

The Bank of Ghana (BoG) has introduced a new policy requiring commercial banks to hold reserves in the same currency as customer deposits, starting June 5, 2025.

This update to the Dynamic Cash Reserve Ratio (CRR) framework is designed to strengthen financial stability and boost the impact of monetary policy.

Previously, banks had to hold all reserves in Ghana cedis, regardless of deposit currency. The CRR remains at 14%, but now banks must align reserves with deposit types, foreign currency reserves for foreign deposits, and cedi reserves for local deposits.

Why This Matters

The BoG aims to reduce currency mismatches on banks’ balance sheets and minimize financial risks.

“From June 5, banks will maintain reserves in their respective currencies,” said BoG Governor Dr. Johnson Asiama after the Monetary Policy Committee’s May 2025 meeting.

The policy rate stays at 28% to curb inflation, which, despite recent improvements, remains above target. The BoG forecasts inflation to fall faster than expected and possibly reach its medium-term target by Q1 2026, barring any shocks.