Cash Reserve Ratio amendment: BoG likely to mop over GH¢16.0bn, exchange rate pressure to ease – Report

The Bank of Ghana is likely to mop over GH¢16.0 billion into unremunerated Cash Reserve Ratio (CRR) while simultaneously releasing US$1.4 billion from the Cash Reserve Ratio.

According to IC Insights, this is expected to create interbank demand for the cedi as banks recalibrate their liquidity framework to comply within the next two weeks.

Again, it could potentially ease the exchange rate pressure in the short-term, barring the impact of higher energy import bills.

The Bank of Ghana unexpectedly amended the CRR requirement, shifting from the 2-year long dynamic CRR system to a uniform ratio of 20.0% for all banks with effect from 04 June 2026.

Additionally, the new reserve will be maintained in the domestic currency, effectively rolling back a year ago change which matched reserve currency, with underlying currency of deposits.

For the Bank of Ghana, IC Insights said “this could reduce banks’ holding of Open Market Operation securities, thereby cutting its sterilisation cost”.

“From a monetary policy perspective, we believe the BoG seeks to deploy this measure to further tighten cedi liquidity as banks will now need to convert foreign currency reserves into cedi reserves. Based on the value of foreign currency deposit as of April 2026, we estimate that the BoG would likely mop over GH¢16.0 billion into unremunerated CRR while simultaneously releasing US$1.4 billion from CRR”.

From the banks’ view, IC Insights said it expects the new CRR regime to penalise foreign exchange deposits as banks will incur higher costs to keep reserve in local currency for every unit of cedi depreciation.

“We foresee stress for banks that have high FX deposits but tight cedi funding. Also, banks such as Societe Generale Ghana which previously enjoyed the lowest CRR of 15.0% (due to high loan-to-deposit ratio) will now face a higher CRR burden of 20.0%”, it added.

This will reduce deployable earning assets and potentially straining profitability.

المصدر: MyJoyOnline (GH)