Banking Sector Anticipates Reduction in Lending Rates Following GRA Adjustment

The Ghana Association of Banks (GAB) says consumers and businesses should expect a drop in lending rates in the coming weeks following the Ghana Reference Rate’s (GRR) recent downward adjustment. GAB CEO John Awuah confirmed that the recalibration, driven by improved macroeconomic indicators and a gradual reduction in inflation, will translate into lower borrowing costs.

Speaking on Accra-based radio, Awuah explained that banks are required to price new loans based on the GRR, making the adjustment a direct benefit to borrowers. “This is good news for businesses looking to expand and for individuals needing credit facilities,” he noted. The change is expected to stimulate private-sector growth by making capital more accessible, particularly for small and medium-sized enterprises (SMEs).

Economic analysts welcomed the development but urged caution, pointing out that while lending rates may decrease, other factors — such as banks’ risk assessments, collateral requirements, and operational costs — still influence final interest rates charged to customers.

The Bank of Ghana’s latest Monetary Policy Committee (MPC) report indicated that inflationary pressures are easing, supported by a stable cedi and increased foreign exchange reserves. This environment, coupled with fiscal consolidation efforts, has allowed the central bank to maintain a more accommodative stance on credit.

Consumer advocacy groups are calling on banks to implement the rate reductions transparently and to avoid hidden charges that could erode the intended benefits. If sustained, the new lending environment could boost household consumption and spur investments across key sectors, adding momentum to Ghana’s post-pandemic economic recovery.