Banking Consultant, Dr. Richmond Atuahene has issued a warning against the proposals suggesting that the Bank of Ghana allocate a fraction of the Cash Reserve Ratio (CRR) to assist local cocoa purchasing companies.
His remarks come in response to a recommendation made by the CEO of COCOBOD, Dr. Randy Abbey, advocating for the redirection of 2 to 3 percent of these reserves to support domestic players in the cocoa industry.
In an interview with Citi Business News, Dr. Atuahene emphasized that the reserve functions as a monetary policy instrument specifically intended for liquidity management, rather than for financing private businesses.
“These are cedis that have been mobilized and secured at the Central Bank,” he clarified. “They are intended to guarantee that there is always liquidity available for banks to function. Diverting these funds for cocoa purchases would diminish the liquidity accessible to banks at the Central Bank.”
Dr. Atuahene further pointed out that the Bank of Ghana does not provide interest on these reserves, referring to them as “unremunerated reserves.”
“Let’s be clear,” he asserted. “When the Bank of Ghana mandates banks to maintain a specific percentage of deposits as reserves, it does not offer interest on those funds. Are we now proposing that money, which banks are already not earning interest on, should be allocated for cocoa purchases? I strongly oppose this,” he remarked.
Dr. Atuahene cautioned that interfering with statutory reserves for commercial purposes could jeopardize the integrity of monetary policy and destabilize the financial sector.
