Average lending rate narrowed to 32.77% in February 2024, from 33.75% per annum in December 2023, according to data from the Bank of Ghana.
This is equivalent to 2.73% per month on loans charged by the banks.
According to the January 2024 Summary of Economic and Financial Data, the average lending rate stood at 32.94% in January 2024.
This drop shows the change in the rate is in line with the disinflation process.
The average lending rate began 2023 at 26.70% (January 2023) before ending the year at 33.75% (December 2023).
Meanwhile, the Ghana Reference Rate stood at 31.31% in February 2024.
The Monetary Policy Committee of the Bank of Ghana is set to announce developments in the economy with a key decision on the Policy Rate today March 25, 2024.
Ahead of the announcement, some analysts and research firms expect the policy rate to remain unchanged to reflect the current inflation.
This is to ensure that the prices of goods and services remain relatively same.
The Bank of Ghana in January 2024 cut its base lending rate to banks by 100 basis points, its first rate cut since 2021.
Average lending rates vary among banks
The average lending rates, however, vary among the banks and the respective sectors they lend to.
Some banks offer loans equivalent to the Ghana Reference Rate, whilst others will charge rates as high as 40%.
This however depends on the risk profile of the customers.