Annual growth in broad money supply (M2+) decelerated to 16.0% in February 2026 from 33.1% in February 2025, marking a significant slowdown in liquidity expansion.
According to the March 2026 Monetary Policy Report by the Bank of Ghana, this outcome reflected a decline in contributions from Net Foreign Assets (NFA), while the contribution of Net Domestic Assets (NDA) remained moderate, consistent with low liquidity creation in the banking system.
This primarily resulted in a low money in circulation, affecting credit expansion and growth in the real sector of the economy.
According to the report, the contribution of NFA to overall liquidity growth declined markedly to 5.7% in February 2026, compared with 27.3% a year earlier.
“This moderation was driven primarily by valuation effects associated with the appreciation of the cedi in 2025, which reduced the domestic-currency value of foreign-denominated assets”, it stated.
The report also stated that the contribution of NDA to M2+ growth increased to 10.3% from 5.8% in February 2025. This development was largely underpinned by increases in Net Claims on Government (NCG) and Other Items (Net).
On the other hand, the contribution of NCG to NDA growth was 3.2% in February 2026, compared to a contribution of negative 0.4% a year earlier, reflecting in part an increased preference for government securities by the banks.
Other Items (Net) accounted for 18.5% of the growth in M2+ growth, compared with negative 5.2% in February 2025.
These upward pressures on NDA were, however, partially offset by a decline in the contribution of claims on the private sector (including public enterprises) during the review period.
