Over the past year, the Ghana Reference Rate (GRR) has followed a clear downward trajectory, gradually easing borrowing costs for businesses and households. From its peak of 29.96 percent in February 2025, the benchmark, the “base rate for pricing loans”, has steadily fallen to 10.06% for April, reflecting a broader moderation in Ghana’s monetary environment. Analysts have stated that the trend is “offering some relief” for “lending rate expectations,” as banks adjust their interest rates in response to lower benchmark rates.
The journey to the current low level began in early 2025, when borrowing costs were substantially higher. In February 2025, the GRR stood at 29.96 percent, reflecting elevated inflation and tight monetary policy. Over the months that followed, the rate followed a “significant downward trend,” falling below 20 percent in August 2025 to reach 19.67 percent. The benchmark is calculated as a “weighted average” of the 91-Day Treasury Bill Rate, the Monetary Policy Rate (MPR), and the Interbank Overnight Rate, which together determine the overall cost of credit in the economy.
Data shows the decline has been supported by reductions in key rates. MPR, a major driver of the GRR, fell from 27.00 percent in February 2025 to 15.50 percent by February 2026. Meanwhile, the 91-day Treasury Bill rate dropped from 26.93 percent to 8.96 percent. These shifts coincided with a sharp slowdown in inflation, as year-on-year price growth for “all consumer prices” fell from 23.1 percent in early 2025 to 3.2 percent by March 2026.
The effect of the lower GRR is evident in the broader credit market. The “average lending rate” charged by commercial banks has followed the benchmark down, moving from 30.12 percent in February 2025 to 19.17 percent by February 2026. As the GRR enters April at 10.06 percent, businesses and households are assessing how quickly the cheaper cost of borrowing will translate into more affordable loans to contribute their part to the growing Ghanaian economy.
The sustained decline in the GRR over the past year highlights a more accommodative credit environment, offering opportunities for private sector investment and potentially easing the financial burden on households. The current trend presents an opportune moment to access loans for expansion, investment, or personal initiatives, benefiting both businesses and individuals.
