Liquidity Coverage Ratio (LCR), measures a bank's ability to meet its short-term obligations, typically within the next 30 days, using high-quality liquid assets. The ratio of core liquid assets to total assets is a financial indicator used to assess a bank's ability to meet its short-term obligations. It represents the proportion of a bank's readily liquid assets (like cash and securities) to its total assets. This is a measure of financial soundness. For the Bank of Ghana, a higher ratio indicates a bank is well-positioned to meet its short-term liabilities, while a lower ratio may suggest potential liquidity risk.

Commercial banks: liquidity ratios

Source: BoG