According to the central bank, depositors are taking such move in a bid to maintain or increase the value of their monies.

 The move, the bank said, can spiral depreciation of the cedi.

Bank of Ghana captured this in the Banking Sector Report for September 2019 it published.

The report shows that the domestic currency component of deposits recorded a slower growth of 9.1 percent to GH¢54.8 billion in August 2019, 20 percentage points lower than the previous year’s growth; whereas, foreign currency deposits grew by 21.2 percent to record GH¢21.2 billion during the review period compared to a growth of 18.6 percent in the previous year.

It further indicates a decline in overall bank deposits. Deposits declined by 12.2 percent to GH¢76 billion in August 2019 compared to the 26.2 percent rate observed a year earlier.

This, the report says, was largely due to significant reduction of the Consolidated Bank Ghana’s (CBG) deposits due to settlements it made to customers as part of the reforms in the banking sector.

Banking Consultant, Dr Richmond Atuahene who spoke to Accra based Business and Financial Times noted that the figures show that more depositors do not have confidence in the local currency, hence, the conversion of their monies to a more stable foreign currency.

“It is an indicator that people are not even interested in holding the cedi and are now switching to a stable currency because they think it is safer. This doesn’t show the robustness of the banking sector that people are talking about. People don’t have confidence in the cedi and that is why the report shows they are converting their monies to foreign currency,” he added.

He then urged that the report is a wake-up call for managers of the banks to put in place strategies that will restore trust in people and encourage them to save with the bank as the report has clearly shown the weakest link of the chain.