In a keynote address, the Bank of Ghana’s Governor set out current monetary and financial stability priorities and flagged near-term regulatory and market-structure changes. He noted that the Monetary Policy Committee had unanimously maintained the policy rate at 28 percent and reiterated a disinflation path consistent with inflation returning to the 8±2 percent target band by the first quarter of 2026, alongside an amendment to banks’ Cash Reserve Ratio (CRR) requirements taking effect on 5 June. Under the revised CRR approach, banks must hold reserves in the same currency as the underlying liabilities, with foreign currency reserves backing foreign currency deposits and cedi reserves backing domestic deposits, to improve foreign exchange risk alignment and liquidity planning. The Governor also pointed to transparency and engagement reforms, including publication of individual MPC voting positions, same-day release of policy decisions, and opening MPC sessions to invited observers, with plans to broaden participation and explore a structured Bank of Ghana–CEO Forum. On financial sector policy, the address outlined a roadmap to regulate Virtual Asset Service Providers and operationalize Ghana’s Open Banking guidelines, described a shift toward “forward-looking supervision” supported by the Bank’s AI and Data Analytics Office and the integration of climate and ESG risks into on-site supervision, and previewed measures to address non-performing loans through consultation with the Ghana Association of Banks. Next steps set out in the remarks include submitting the proposed VASP framework to Cabinet by September, issuing an NPL-related compliance notice after consultations conclude, and providing further guidance on planned events marking the 60th anniversary of the Ghana cedi, alongside a reminder that the cedi remains Ghana’s only legal tender.
Bank of Ghana 2025-05-26
Bank of Ghana amends cash reserve rules to require currency matching from 5 June
The Bank of Ghana's Governor outlined monetary and financial stability priorities, maintaining the policy rate at 28% and targeting inflation within the 8±2% band by Q1 2026. Key regulatory changes include a revised Cash Reserve Ratio approach and a roadmap for regulating Virtual Asset Service Providers. The address also highlighted transparency reforms, a shift to forward-looking supervision, and measures to address non-performing loans.