The Bank of Ghana reports a marginal decline in average lending rates, which fell to 30.45% in October 2024, down from 32.69% during the same period in 2023. This marks a continued, albeit slow, reduction since the start of the year.
Rates have steadily decreased from 32.94% in January 2024 to 30.71% in July, though a slight uptick was observed in August at 30.79% before falling again. The Ghana Reference Rate (GRR) also declined to 28.91% in October, down from 29.31% in August.
The reduction aligns with broader economic adjustments aimed at improving credit accessibility and supporting economic activity. Lower lending rates typically signal efforts by financial authorities or market conditions to stimulate borrowing and investment.
Data shows a consistent but modest reduction in lending rates over 2024. The average rate dropped from 32.94% in January to 30.45% in October, indicating incremental progress rather than drastic changes. This steady decline suggests ongoing policy measures or market corrections rather than one-time interventions.
The Central Bank has maintained the policy rate at 27% for November 2024, citing persistent inflationary pressures driven by volatile food prices, currency exchange fluctuations, fuel costs, and utility adjustments.
The Ghana Reference Rate (GRR), which influences lending rates, also declined to 28.91% in October 2024 from 29.31% in August. This downward trend in the benchmark rate provides a basis for commercial banks to lower their lending rates. However, the variance in rates among banks and sectors highlights differences in customer risk profiles and loan terms.
Notably, lending rates continue to vary significantly among banks, influenced by borrower risk profiles. While some institutions offer rates near the GRR, others charge as high as 40%, underscoring the impact of individual risk assessments in loan pricing.
This downward trend in lending rates suggests a cautiously improving financial environment, offering potential relief to borrowers despite ongoing inflationary challenges.
