Liquidity Slows Down in First 4 Months of 2026 – BoG
Annual growth in Ghana’s broad money supply (M2+) moderated during the first four months of 2026, reflecting a slowdown in liquidity expansion compared with the same period last year, according to the Bank of Ghana (BoG).
Data contained in the central bank’s May 2026 Monetary Policy Report (MPR) showed that annual growth in broad money supply declined to 22.2 per cent in April 2026 from 26.7 per cent recorded in April 2025.
The report attributed the moderation primarily to a sharp decline in the contribution of Net Foreign Assets (NFA) to overall money supply growth, although stronger growth in Net Domestic Assets (NDA) helped to cushion the impact.
According to the BoG, the contribution of Net Foreign Assets to liquidity growth fell to negative 5.2 per cent in April 2026 from a positive 36.1 per cent in the corresponding period of 2025.
The central bank explained that the decline was driven largely by valuation effects resulting from the appreciation of the cedi in 2025, which reduced the domestic currency value of foreign currency-denominated assets held within the banking system.
It further noted that the accumulation of foreign assets by banks slowed considerably compared with the strong external inflows recorded a year earlier. The weaker pace of foreign asset growth further reduced the contribution of Net Foreign Assets to overall money supply expansion during the review period.
In contrast, Net Domestic Assets emerged as the principal source of liquidity growth during the first four months of the year.
The report indicated that the contribution of NDA to broad money supply growth increased significantly to 27.4 per cent in April 2026 from negative 9.4 per cent in April 2025.
According to the BoG, the improvement was supported by higher Net Claims on Government (NCG), growth in Other Items Net (OIN) and increased credit to the private sector.
The contribution of Net Claims on Government to NDA growth rose sharply to 15.5 per cent in April 2026, compared with negative 14.5 per cent in April 2025.
The central bank attributed this development partly to increased holdings of Government of Ghana (GoG) securities by banks, which boosted domestic asset growth during the period.
The report also showed that stronger claims on the private sector contributed to the expansion in Net Domestic Assets, reflecting continued lending activity within the banking sector despite tighter liquidity conditions compared with the previous year.
Overall, the latest monetary developments indicate that although domestic sources of liquidity strengthened during the review period, they were insufficient to offset the sharp decline in the contribution of foreign assets. As a result, overall money supply growth moderated compared with the corresponding period in 2025.
The Bank of Ghana’s assessment suggests that exchange rate developments, slower foreign asset accumulation and changes in banks’ investment patterns significantly influenced liquidity conditions during the first four months of 2026, with domestic assets becoming the main driver of monetary expansion.
