Why BoG Took Action
The Bank of Ghana (BoG) has issued a landmark directive requiring commercial banks to Stop Foreign Currency Cash Payments to large corporates unless such transactions are backed by equivalent deposits.
In a circular dated 20 August 2025, the BoG ordered banks to discontinue unfunded foreign-currency cash payouts, warning that non-compliance would attract regulatory sanctions. According to the official notice, the move aims to tighten foreign exchange management, curb speculative demand, and restore stability to the cedi.
This announcement comes at a time when the cedi, despite being celebrated as the world’s top performing currency in 2025, has faced renewed volatility due to strong corporate demand for dollars and euros.
What the Directive Says (and Doesn’t)
The BoG directive is clear:
- Banks must Stop Foreign Currency Cash Payments to corporates unless fully supported by equivalent FCY deposits lodged by the same institution.
- All foreign currency payouts must be backed by documented proof of deposits.
- Violations will trigger sanctions against non-compliant banks.
MyJoyOnline’s coverage confirms the directive’s immediate enforcement, quoting the central bank’s exact language.
Not a Total Ban
It’s important to note that this isn’t a blanket ban on FX access. Companies can still withdraw foreign exchange — but only if the equivalent amount has already been deposited. The intent is not to cut off supply, but to Stop Foreign Currency Cash Payments that create artificial demand.
Historical Context: BoG’s Fight With FX Pressures
This isn’t BoG’s first attempt to control FX outflows. In May 2025, the central bank updated guidance on over-the-counter FX cash withdrawals from FEA/FCA accounts, allowing individuals and institutions limited access. However, the new directive takes a stricter line with large corporates, ensuring that big-ticket withdrawals no longer bypass the system.
Similar measures have been introduced in Nigeria and Kenya, where central banks intervened to block leakages in FX markets. As Reuters reported, such interventions are critical when currencies face sustained pressure.
Why Corporates Are Affected Most
The policy explicitly targets Bulk Oil Distribution Companies (BDCs) and mining firms, which account for a large share of Ghana’s forex demand. By ordering banks to Stop Foreign Currency Cash Payments without matching deposits, the BoG is closing a loophole that enabled speculative demand to spill over into the wider economy.
For example, oil importers often sought bulk cash withdrawals to fund supply contracts, creating sudden spikes in demand. By requiring pre-funding, the BoG ensures the forex used for such payments already exists within the system.
Step-by-Step: How Banks Must Comply
Internal Policy Updates
Banks must immediately update their internal memos, notifying all departments that they are to Stop Foreign Currency Cash Payments to corporates without deposits.
Deposit Verification
Every foreign currency payout must be verified against equivalent deposits already held. This step ensures no unfunded requests pass through.
Documentation & Audit Trails
Banks must retain detailed documentation on the source of funds for every transaction. Failure to provide these records could lead to sanctions.
Escalation Procedures
If corporates request unfunded payouts, banks must escalate and refuse, ensuring strict adherence to the BoG directive.
What Corporates Should Do
Pre-Fund Early
Corporates must plan ahead by placing equivalent deposits before requesting withdrawals. Without this, banks are obliged to Stop Foreign Currency Cash Payments.
Use Non-Cash Channels
Switching to bank transfers, letters of credit, or forward contracts can reduce the need for large cash transactions.
Plan With Suppliers
Importers and exporters must align with suppliers to account for these new timelines.
Keep Records
Proper record-keeping will help corporates prove compliance when banks request documentation.
Market Impact: Stabilizing the Cedi
Economists suggest the policy could help stabilize the cedi by cutting down speculative demand. Dr. Lord Mensah of the University of Ghana explained:
“This directive ensures every dollar in circulation is accounted for. By forcing banks to Stop Foreign Currency Cash Payments that aren’t funded, the BoG is closing a key leak in the system.”
The cedi, once celebrated for its rise in global rankings, has since faced pressure. By tightening rules, the BoG hopes to sustain gains made earlier this year.
A Reuters market update from August 21, 2025, noted that Ghana’s interventions, including forward auctions and stricter FX monitoring, were crucial in slowing depreciation fears.
Link to Wider Economic Reforms
This policy fits into Ghana’s broader reform agenda. President John Dramani Mahama has already announced sweeping measures, such as eliminating investor capital requirements under the revised GIPC Act, to attract business and strengthen regulatory oversight.
At the same time, protests in Ghana’s cocoa sector over pricing reforms (Cocoa Farmers Protest Prices in Ghana) highlight the broader challenges facing the economy. In each case, regulation is being used to balance market stability with growth.
Challenges and Risks
While the directive is widely welcomed, some corporates fear it may slow access to much-needed forex for imports. If supply shortages arise, the cedi could still face pressure.
Analysts warn that implementation must be consistent, and BoG must ensure FX supply remains available through auctions and legitimate inflows. Otherwise, companies might seek alternative — even informal — channels.
Conclusion
The BoG’s directive to Stop Foreign Currency Cash Payments without matching deposits is one of the boldest currency-stabilizing measures in recent years. By tightening forex controls, the central bank seeks to enhance transparency, reduce speculation, and safeguard the cedi’s future.
As enforcement begins, the effectiveness of the policy will depend on strict compliance by banks and proactive planning by corporates. With Ghana’s currency stability on the line, this directive could mark a turning point in the nation’s foreign exchange management.
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