Consumers and businesses in Ghana could soon see reduced borrowing costs, following a sharp drop in the Bank of Ghana’s Monetary Policy Rate to 25%, the lowest level in two years, according to the CEO of the Ghana Association of Banks (GAB), Mr. John Awuah.
Mr. John Awuah, has indicated that recent monetary easing by 300 basis point the Bank of Ghana is expected to translate into lower lending rates for consumers.
Speaking to 3Business on the sidelines of a wreath-laying ceremony held at the forecourt of the Jubilee House in honour of eight individuals who died in a helicopter crash, he explained that the Bank’s decision to cut the Monetary Policy Rate (MPR) from 28% to 25% is already influencing commercial lending conditions.
“As a borrower from BoG, the facility rate is benchmarked to the Ghana Reference Rate. As the reference rate goes down, you should see the full weight of that reduction in your new lending rate,” he stated.
The Ghana Reference Rate (GRR), which serves as a benchmark for setting lending rates by commercial banks, is derived from key indicators including the MPR, the 91-day Treasury bill rate, interbank lending rates, and a risk premium.
He added that the reference rate has declined significantly—from around 22.23% to 19.67%—amplifying the potential relief for borrowers.
Supporting this trend, the 91-day Treasury bill rate has dropped to approximately 10%, reflecting broader declines across key market indicators.
The development is seen as a positive signal for businesses and individuals seeking credit, especially after prolonged periods of high interest rates driven by tight monetary policy aimed at controlling inflation.
This is the first time in three years the policy rate has dropped to 25% and declined by 300 basis point in over a decade.
