Ghana’s broad money supply has recorded a massive acceleration in money supplyy, with annual growth in M2+ reaching 28.5% in June 2026, raising fresh attention to the rapidly expanding liquidity within the financial system.
The latest figures from the Bank of Ghana (BoG) show a sharp increase from the 15.6% recorded in June 2025, underscoring the significant expansion in liquidity over the one-year period.
The surge was driven by stronger growth in both Net Foreign Assets (NFA) and Net Domestic Assets (NDA), pointing to increased foreign asset accumulation and rising domestic financial activity.
Foreign Assets Become Major Liquidity Driver
According to the Bank of Ghana, the contribution of NFA to total liquidity growth increased substantially to 14.8% in June 2026, compared with 9.5% in June 2025.
The central bank attributed the stronger contribution to an increase in the rate of foreign asset accumulation within the banking sector during the period under review.
The development comes as Ghana’s external position has received increased attention amid efforts to strengthen foreign exchange reserves and improve macroeconomic stability.
With NFA accounting for almost half of the total contribution to M2+ growth, the latest figures highlight the growing importance of foreign assets in driving liquidity conditions across the economy.
Domestic Assets Also Fuel Money Supply Surge
While foreign assets provided a major boost, domestic factors also played a significant role in the expansion.
The contribution of Net Domestic Assets to M2+ growth increased to 13.7% in June 2026, more than double the 6.1% recorded in June 2025.
The Bank of Ghana said the stronger contribution of NDA was largely driven by increases in Net Claims on Government and Claims on the Private Sector.
Net Claims on Government contributed 4.9% to NDA growth in June 2026, compared with a negative contribution of 3.0% in June 2025.
The shift reflects, in part, increased holdings of Government of Ghana securities by banks, highlighting a stronger role for government instruments in the financial system.
Private Sector Credit Records Major Jump
One of the most striking developments was the sharp increase in credit to the private sector, including public enterprises.
The contribution of private sector credit to money supply growth climbed to 11.3% in June 2026, from just 2.1% during the corresponding period in 2025.
The increase represents a substantial expansion in the flow of credit and could have important implications for businesses and households seeking financing.
Stronger credit growth can support economic activity by providing businesses with resources for investment, expansion and working capital. However, rapid monetary expansion can also attract attention from policymakers because of its potential implications for inflation and financial stability if liquidity grows faster than economic output.
Demand Deposits Lead Deposit Expansion
The composition of M2+ growth also reveals significant changes in how money is being held within the financial system.
Demand deposits contributed 11.8% to money supply growth in June 2026, up from 8.1% in June 2025.
The Bank of Ghana linked the development to continued deposit mobilisation by banks, suggesting that financial institutions have been successful in attracting and retaining funds from customers.
The rise in demand deposits indicates that a larger portion of the expanding money supply is being held in accounts that can be accessed relatively quickly for transactions and other financial activities.
Foreign Currency Deposits Make Dramatic Turnaround
Foreign currency deposits also recorded a remarkable turnaround during the period.
FCDs contributed 5.9% to M2+ growth in June 2026, compared with a negative contribution of 6.3% in June 2025.
According to the Bank of Ghana, the development was mainly driven by the discontinuation of the dual currency Cash Reserve Requirement policy.
The reversal represents one of the more notable changes in the composition of money supply, with foreign currency deposits moving from a drag on growth to a significant contributor within just one year.
Cash Holdings Lose Momentum
Despite the overall surge in liquidity, currency outside banks moved in the opposite direction.
Its contribution to M2+ growth declined to 3.6% in June 2026, from 4.7% in June 2025.
The Bank of Ghana attributed the decline to subdued demand for cash holdings.
The development could indicate a continued preference for keeping funds within the formal banking system rather than holding physical cash, particularly as digital payments and electronic banking services continue to expand.
Savings and time deposits also recorded a decline in their contribution, falling to 7.2% from 9.2% over the same comparative period.
Liquidity Expansion Puts Spotlight on Monetary Conditions
The sharp acceleration in broad money growth presents a complex picture for Ghana’s economy.
On one hand, stronger deposits, foreign asset accumulation and private sector credit can support economic activity and improve financial intermediation. On the other hand, sustained rapid growth in money supply could become an important consideration for monetary policy if it begins to generate excessive demand pressures.
The June figures therefore place renewed focus on how the Bank of Ghana balances liquidity conditions with its broader objectives of maintaining price and financial stability.
With M2+ growth accelerating from 15.6% to 28.5% in just one year, Ghana’s financial system is experiencing a significant expansion in liquidity. The key question for markets will be whether this surge translates into stronger productive activity without reigniting inflationary pressures.
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