Banks Cannot Ignore Ghana Reference Rate Says Finance Expert

Banks

Competition volition unit Ghanaian banks to trim lending rates arsenic the Ghana Reference Rate continues falling, according to a elder concern lecturer who says lenders attempting to support precocious charges volition terms themselves retired of the market.

Dr. Benjamin Amoah, a elder lecturer astatine the University of Ghana Business School, told JoyNews that banks operating successful the country’s competitory fiscal situation cannot disregard the benchmark complaint erstwhile mounting indebtedness prices. He explained that the Ghana Reference Rate (GRR) serves arsenic the industry-wide starting constituent for pricing recognition facilities, and informed borrowers present comparison slope rates against this benchmark earlier making borrowing decisions.

The comments travel arsenic Ghana’s monetary argumentation situation undergoes melodramatic transformation. The Bank of Ghana chopped its argumentation complaint by 350 ground points to 18 percent successful November 2025, bringing full reductions for the twelvemonth to 1,000 ground points. This marks 1 of the astir assertive easing cycles successful caller history, with the complaint reaching its lowest level successful much than 3 years.

The GRR fell to 17.93 percent successful November 2025, down from 29.72 percent astatine the commencement of the year. The benchmark complaint incorporates respective factors including the monetary argumentation rate, Treasury measure rates, ostentation rates, and interbank lending costs. Commercial banks past adhd their hazard premiums, nett margins, and different charges to this basal erstwhile determining existent lending rates for customers.

Dr. Amoah emphasized that marketplace forces volition compel banks to set their pricing downward arsenic the notation complaint declines. He described the existent play of important complaint simplification arsenic peculiarly hard for immoderate slope attempting to support artificially precocious lending charges.

“The Ghana Reference Rate is much oregon little the industry-wide rate. You tin telephone it the starting constituent for pricing the recognition facility,” helium said. “In a competitory environment, a slope cannot disregard the Ghana notation rate. This is an unfastened market, and each azygous borrower would similar to look astatine the Ghana notation complaint to marque an concern decision, either to put oregon to borrow.”

The concern adept added that banks look losing customers if their rates drift excessively acold supra marketplace norms. Borrowers, whether ample corporations oregon tiny businesses, present person greater fiscal literacy and actively store for the astir competitory rates disposable crossed the banking sector.

“So it volition beryllium hard for 1 to reason that banks volition conscionable overlook, particularly this play of important diminution successful the rate, and spell with the mindset that we are going to complaint our ain complaint connected the market,” Dr. Amoah continued. “The marketplace volition unit you to conform. So definitely, banks volition beryllium forced to trim their rates. They can’t bash thing astir it. If not, contention volition footwear you out.”

He warned that lenders refusing to set look superior commercialized consequences. Banks that support precocious rates portion competitors little theirs volition conflict to pull borrowers and make indebtedness volumes, threatening their profitability and marketplace position.

Ghana’s melodramatic disinflation has created abstraction for the assertive monetary easing. Headline ostentation peaked supra 54 percent successful December 2022 but fell to 8 percent by October 2025, dropping into the Bank of Ghana’s people scope of 6 to 10 percent. The cedi has besides strengthened significantly, appreciating 32.2 percent against the US dollar successful the twelvemonth done November 2025.

Bank of Ghana Governor Johnson Asiama cited improved ostentation dynamics, speech complaint stability, and stronger economical fundamentals arsenic justification for the argumentation complaint reductions. The cardinal slope projects ostentation volition stay unchangeable astir its people done the archetypal fractional of 2026.

Average lending rates person already responded to the changing environment. According to Bank of Ghana data, rates fell from 26.6 percent to 24.2 percent, portion yields connected wealth marketplace instruments besides declined. The 91-day Treasury measure complaint dropped from 13.4 percent successful July 2025 to 10.3 percent successful August.

The Ghana Association of Banks publishes the notation complaint monthly, providing transparency connected the baseline each lenders usage for pricing. Industry analysts expect the November argumentation complaint chopped to provender done to further GRR reductions successful coming months, perchance bringing further alleviation to businesses and households seeking credit.

For businesses, little borrowing costs could amended entree to moving capital, enactment enlargement plans, and easiness currency travel pressures. Small and mean enterprises, which person faced peculiarly choky recognition conditions during caller years of precocious rates, basal to payment importantly if banks walk the afloat simplification done to customers.

However, immoderate borrowers whitethorn not spot contiguous relief. Those with fixed-rate loans volition request to renegotiate presumption to payment from the improved complaint environment. Variable complaint borrowers should spot automatic adjustments arsenic their rates way the changing GRR and underlying marketplace conditions.

Dr. Amoah’s investigation suggests banks person small prime but to respond to marketplace realities. With the GRR providing transparent pricing benchmarks and borrowers progressively blase astir comparing offers, lenders maintaining rates importantly supra competitors hazard accelerated erosion of their indebtedness portfolios.

The competitory dynamics widen beyond elemental complaint comparisons. Banks indispensable besides see their hazard appraisal methodologies, operational costs, and superior requirements erstwhile pricing loans. But Dr. Amoah’s cardinal constituent remains that nary slope tin wholly disregard the notation complaint that defines marketplace norms.

Whether the expected lending complaint reductions materialize afloat depends connected however rapidly banks set their pricing models and however aggressively they vie for customers successful the changing environment. Early indicators suggest the downward unit connected rates is gathering arsenic the GRR continues its descent from the elevated levels seen earlier successful 2025.