Bank of Ghana to Mop Up GH¢16.0 Billion in Cash Reserve Ratio Amendment

The Bank of Ghana has announced a surprise amendment to the Cash Reserve Ratio, shifting from a dynamic system to a uniform ratio of 20.0% for all banks. This change, which takes effect on June 4, 2026, is expected to mop up over GH¢16.0 billion into unremunerated Cash Reserve Ratio. It's also expected to release US$1.4 billion from the Cash Reserve Ratio.

The new reserve will be maintained in the domestic currency, effectively rolling back a year-old change that matched reserve currency with the underlying currency of deposits. IC Insights notes that this move could reduce banks' holding of Open Market Operation securities, thereby cutting the Bank of Ghana's sterilisation cost. They're expecting this change to have a significant impact on the banking sector.

From a monetary policy perspective, the Bank of Ghana seeks to deploy this measure to further tighten cedi liquidity. Banks will now need to convert foreign currency reserves into cedi reserves. Based on the value of foreign currency deposits as of April 2026, IC Insights estimates that the Bank of Ghana would likely mop up over GH¢16.0 billion into unremunerated CRR. They'll also release US$1.4 billion from CRR.

For banks, the new CRR regime is expected to penalise foreign exchange deposits. Banks will incur higher costs to keep reserves in local currency for every unit of cedi depreciation. Banks with high FX deposits but tight cedi funding will face stress. Those like Societe Generale Ghana, which previously enjoyed a lower CRR of 15.0% due to a high loan-to-deposit ratio, will now face a higher CRR burden of 20.0%.

This change will reduce deployable earning assets. It may also strain profitability. The impact on banks' liquidity and profitability will be significant. They'll need to adjust their business models to comply with the new regulations.

The Bank of Ghana's decision to amend the Cash Reserve Ratio is a move to manage the country's monetary policy. The central bank has been working to stabilize the economy and manage inflation. This move is expected to have a positive impact on the economy in the short term. However, its long-term effects aren't yet clear.

'This could reduce banks' holding of Open Market Operation securities, thereby cutting its sterilisation cost'

• IC Insights

The amendment to the Cash Reserve Ratio is a significant development in Ghana's monetary policy. As the economy continues to evolve, it's essential to monitor the impact of this move on the banking sector. It's also crucial to monitor the impact on the overall economy. The Bank of Ghana's decision to amend the Cash Reserve Ratio is a step towards managing the country's monetary policy. They're working to stabilize the economy.

In the coming weeks, it will be crucial to watch how banks adjust to the new regulations. It's also important to see how the economy responds to the change. The Bank of Ghana's move to amend the Cash Reserve Ratio is a significant step. It's a step towards managing the country's monetary policy. Its impact will be felt across the economy.

The banking sector in Ghana is expected to undergo significant changes in the coming months. The amendment to the Cash Reserve Ratio is just one of the many moves the Bank of Ghana has made. They're working to stabilize the economy. As the country continues to grow and develop, it's essential to monitor the impact of these changes. It's crucial to monitor the impact on the economy and the banking sector.

The Bank of Ghana's decision to amend the Cash Reserve Ratio is a significant move. It will have far-reaching implications for the economy. As the country continues to evolve, it's essential to monitor the impact of this move. It's crucial to monitor the impact on the banking sector and the overall economy. The amendment to the Cash Reserve Ratio is a step towards managing the country's monetary policy. It's a step towards stabilizing the economy.

The Bank of Ghana's amendment to the Cash Reserve Ratio is a significant move. It's expected to ease exchange rate pressure in the short term. However, its long-term effects aren't yet clear. As the economy continues to evolve, it's essential to monitor the impact of this move. It's crucial to monitor the impact on the banking sector and the overall economy. The Bank of Ghana will continue to work to stabilize the economy and manage inflation. They won't stop working until the economy is stable.