BoG implements unification of cash reserve ratio for local and foreign currency deposits

In a significant move, the Central Bank has announced the unification of the Cash Reserve Ratio for both foreign currency-denominated deposits and domestic currency deposits held by banks.

According to the Governor of the Bank of Ghana (BoG), Dr Ernest Addison, effective November 30, 2023, the newly set unified Cash Reserve Ratio stands at 15%, emphasizing the bank’s commitment to reinforcing liquidity management operations.

Dr Addison made the disclosure during the 115th Monetary Policy Committee meeting on Monday, November 27, 2023.

The decision to unify currency holdings, requiring both cedi and foreign currency deposits to be held in cedis, the Governor noted, aims to tackle excess structural liquidity conditions prevalent in the market, adding that this strategic measure is expected to provide an additional impetus to the ongoing disinflation process.

The Governor further emphasized the BoG’s continuous vigilance over developments in the banking sector. The committee pledges to deploy other policy tools as needed to support stability, underscoring its commitment to steering the nation’s financial landscape through these strategic adjustments.

Source:norvanreports