The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has announced that the central bank is closely monitoring the banking sector due to rumours that some banks may be planning to close personal foreign currency savings accounts by the end of July.
Despite banks’ refutations of these claims, Dr. Addison emphasized vigilance.
Dr Addison addressed concerns about the rumoured account closures at the 119th Monetary Policy Committee press conference on July 26, 2024. He clarified that although the banks have denied the rumours, the BoG is taking the issue seriously. The governor also responded to questions about whether these rumours could be linked to the BoG’s recent directive for banks to prioritize lending to the private sector over government borrowing.
Dr Addison explained that the directive aimed to withdraw excess liquidity from the economy. He noted that the data indicates progress in this area, with a gradual increase in credit to the private sector. However, he acknowledged banks’ challenges, including higher non-performing loans and associated risks, which may contribute to their cautious lending practices.
The governor clarified that the potential closure of foreign currency accounts might not directly stem from the BoG’s liquidity measures. He stated that while the central bank has engaged with banks on this matter, only one bank has reportedly issued letters to clients about closing foreign currency accounts. The BoG monitors the situation closely to ensure transparency and prevent unintended consequences.
Ghana Association of Banks’ Response
In response to the rumours, the Chief Executive of the Ghana Association of Banks (GAB), John Awuah, clarified that only one bank decided to discontinue foreign currency accounts and not the banking sector as a whole. Awuah assured that no other banks are discontinuing foreign currency deposits.
He explained that the bank’s decision was driven by a desire to stabilize the local currency and curb speculation. The bank observed that customers were hoarding foreign currencies in their savings accounts, contributing to the depreciation of the Cedi. The move was intended to address this issue and stabilize the local currency.
The GAB’s response aimed to reassure the public and clarify that the issue did not indicate a broader trend within the banking industry.
