Growth in reserve money continued to increase in June 2024, partially on the back of the implementation of dynamic CRR, which induced growth in the regulatory reserves of banks, the Bank of Ghana has said in its Monetary Policy Report of July 2024.

It said Reserve Money (RM) grew by 77.8 per cent in June 2024, compared with 29.2 per cent recorded in the corresponding period of 2023.

The introduction of the dynamic CRR instigated disinvestments of BoG bills and overnight placements by banks to shore up regulatory reserves, reflecting in injections through sterilisation operation, the report noted.

It added that Net Claims on Government (NCG) “contracted,” reflecting the lingering impact of the Domestic Debt Exchange Programme (DDEP) on the central bank balance sheet while net claims on Deposit Money Banks declined on the back of the build-up in foreign currency deposits with the central bank.

The contribution of NDA to the growth in RM was 17.6 per cent, compared to 44.5 percent over the same comparative period last year.

The NFA of the central bank expanded, reflecting a net build-up in foreign assets, largely driven by inflows from the Gold for Reserves (G4R) programme, forex purchases, proceeds from the IMF ECF, and the cocoa syndicated loan.

The contribution of the NFA to the growth in RM was 60.2 per cent in June 2024, relative to a contribution of negative 15.2 per cent recorded in the corresponding period of 2023.