Ghanaian banks anticipate a marginal increase in interest rates for borrowers in the coming weeks. This projection stands despite the Bank of Ghana maintaining its policy rate at 14%, a decision made on May 22, 2026. The expected rise in borrowing costs is primarily due to movements in key variables that influence the Ghana Reference Rate (GRR).
John Awuah, Chief Executive of the Ghana Association of Banks, confirmed this outlook. He explained that slight increases in treasury bill rates are the main driver for the anticipated rise in borrowing costs. The Ghana Reference Rate, which guides commercial bank lending rates, is determined by a combination of factors, not just the policy rate.
This development unfolds within a broader economic context where various financial indicators are in flux. The Ghana Reference Rate for May 2026 saw a marginal decrease to 10.03% from 10.06% in April 2026. This slight dip was mainly propelled by a minor decline in the interbank rate, which lowered to 10.30% at the end of April 2026. However, treasury bill rates moved in the opposite direction, rising from 4.81% to 4.92% during the same period. These conflicting movements underscore the complexity of setting lending rates in Ghana.
Mr. Awuah addressed criticisms about commercial banks' responsiveness to policy rate changes. He argued that available data does not support assertions that banks fail to adjust interest rates. He noted that the Ghana Reference Rate considers three distinct variables. Focusing on only one variable, such as the policy rate, does not fully reflect how the new Ghana Reference Rate is set.
The anticipated rise in borrowing costs will impact businesses and individuals seeking credit. Decision-makers and markets will closely observe how these marginal increases affect economic activity and investment decisions. Lenders will likely adjust their pricing strategies to reflect the new market realities. However, Mr. Awuah also highlighted that some businesses and individuals with strong credit histories are currently securing single-digit interest rates, as low as 9% for personal loans. This indicates a differentiation in lending practices based on client risk profiles and market responsiveness by commercial banks.
The central bank's consistent policy rate aims to stabilize inflation and support economic growth. Yet, the upward pressure from treasury bill rates suggests underlying market dynamics are influencing commercial lending independently. This situation requires close monitoring by financial regulators and participants to ensure market stability and fair lending practices.