The Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has issued a firm but thoughtful appeal to commercial banks across the country to exercise restraint and sensitivity in adjusting lending rates.
This appeal follows the Monetary Policy Committee (MPC) of BoG’s recent decision to raise the policy rate from 27% to 28%.
Dr. Asiama, speaking during his maiden post-MPC meeting with CEOs of banks, admitted to the inevitable impact the rate hike will have on borrowing costs for businesses and households.
However, he was quick to point out that Ghana’s financial system remains robust and well-capitalized enough to absorb the short-term shocks associated with tighter monetary policy.
“While the policy tightening will affect funding costs and credit pricing in the near term, the financial system is well-positioned to absorb these effects,” he said.
To mitigate the impact of the policy hike on businesses, the Governor called on banks to adopt a measured approach in response to the policy change.
He pleaded that rather than passing on full burden to borrowers indiscriminately, financial institutions should adopt prudent, transparent, and tailored strategies in adjusting interest rates.
“We therefore urge banks to exercise prudence in adjusting lending rates and maintain transparent communication with clients. Viable businesses should continue to receive support, and tailored solutions should be explored to mitigate the impact on the most vulnerable sectors,” Dr. Asiama advised.
The central bank’s policy rate hike is aimed at reinforcing Ghana’s ongoing disinflation process, with headline inflation easing gradually from 23.8% in December 2024 to 22.4% in March 2025. While the move is necessary to anchor inflation and stabilize the cedi, the Governor emphasized that it must not come at the cost of economic recovery and inclusive growth.
The appeal of Dr. Asiama to the banks comes at a time when many small and medium enterprises (SMEs), which form the backbone of Ghana’s economy, are grappling with high lending costs.
Ghana’s current lending rate hovers around 30.12% from 32.3% a year ago, recording just a marginal decline. Businesses have been bemoaning this high lending rate as it makes them uncompetitive with their counterparts in neighbouring countries. The rate is higher than the Sub-Saharan African average and hence making Ghanaian businesses uncompetitive.
With the recent hike in policy, the rates are expected to increase, hence the call by the Governor to the banks to exercise prudence.
The Governor further urged the banks to ensure clear and proactive communication between banks and their clients during this period of adjustment. Transparent engagement, he argued, will not only foster trust but also help customers make informed decisions and maintain positive banking relationships.
