The Bank of Ghana (BoG) in achieving its financial stability objective as mandated in Section 3 of the BOG Act, 2002 (Act 612) and as amended by the BOG Amendment Act, 2016 (Act 918), has developed an operational liquidity assistance framework for banks, savings and loans companies and finance houses in the country.
The liquidity assistance framework include the Intraday Liquidity Facility (ILF) and Emergency Liquidity Assistance (ELA).
According to the Central Bank, the ILF is to support the efficient functioning of the payment and settlement systems whereas the ELA is to provide liquidity support to eligible and solvent banks, savings and loans companies, and finance houses (BSFs) facing temporary liquidity challenges.
The provision of the two liquidity assistance, the BoG notes, is designed to address weaknesses identified during the banking sector clean-up exercise.
“The framework aims to promote transparency, allow better liquidity planning by banks, savings and loans companies and finance houses, while protecting the balance sheet of the BoG,” noted the Central Bank.
Find below details of the BoG’s newly developed Liquidity Assistance Framework: