BoG introduces new measures to enhance liquidity management

The Bank of Ghana has announced additional measures to regulate money supply in the economy.

According to Governor Dr. Johnson Asiama, these steps are part of broader efforts to maintain macroeconomic stability and improve the effectiveness of monetary policy.

Speaking at a press briefing following the Monetary Policy Committee’s 123rd regular meeting, Dr. Asiama stated that alongside the decision to raise the policy rate to 28.0 percent, the BoG is introducing a 273-day financial instrument to help manage liquidity levels.

According to the BoG Governor, the three additional measures include: 1. Introduction of a 273-day Instrument to expand the bank’s sterilization toolkit, allowing for better liquidity management. 2. Intensified monitoring of banks’ net Open Positions (NOPs) to increase oversight to ensure financial institutions comply with regulatory requirements, reducing risks in the banking sector. 3. Review the Structure of the Cash Reserve Ratio (CRR) to assess the broader impact of CRR on liquidity conditions and financial intermediation to ensure an optimal balance between stability and economic growth.

The central bank also reiterated its commitment to price stability and fiscal consolidation as outlined in the 2025 budget.

It emphasized that a tight monetary policy remains essential to preventing excess liquidity from disrupting inflation control efforts.

Overall, these measures aim to maintain financial system stability and safeguard the economy against unforeseen shocks.