Interest rates across Ghana’s financial system have declined sharply over the past year, easing pressure on businesses and supporting a gradual rebound in private-sector lending, according to the Bank of Ghana’s latest Monetary Policy Committee (MPC) briefing.
Governor Dr. Johnson Pandit Asiama said the significant drop in market rates reflects the central bank’s monetary policy actions and broader macroeconomic improvements. He noted that the interest equivalent of the 91-day benchmark Treasury bill rate fell to 10.6% in October 2025, down from 25.8% in October 2024, a dramatic correction that signals renewed stability in the financial markets.
Average lending rates across commercial banks have also eased. “Average bank lending rate declined to 22.2% compared with 30.5% in the same comparative period,” Dr. Asiama said, adding that this has begun to revive credit flows to the private sector after months of contraction.
The central bank highlighted that private-sector credit growth, which had contracted by 7.1% in May 2025, has now recovered to 5.4% in real terms as of October 2025. The reversal is a crucial sign that businesses are regaining confidence and banks are becoming more willing to extend credit.
Financial market observers view the decline in interest rates as a direct outcome of the bank’s tight monetary policy earlier in the year, efforts to stabilize the Ghana cedi, and improved inflation conditions. Headline inflation has dropped sharply from 23.5% in January to the BoG’s central target of 8% in October, easing borrowing risks and helping to anchor market expectations.
Lower interest rates are expected to support economic activity further heading into 2026. Sectors such as manufacturing, agribusiness, trade, transport, and services, which rely heavily on credit, are projected to benefit from improved access to financing.
Banks have also reported better asset quality and stronger profitability, creating further space for lending expansion. With non-performing loans declining to 19.5% in October from 22.7% a year earlier, lenders are entering the year-end period in a stronger position to support businesses.
Economists caution, however, that the durability of the lending recovery will depend on maintaining low inflation, preserving fiscal discipline, and ensuring that the currency remains stable.
