Commercial banks have started adjusting lending rates downward on both existing and new loans following the latest reduction in the Ghana Reference Rate (GRR), signalling easing borrowing conditions for businesses and households.
The Chief Executive Officer of the Ghana Association of Banks (GAB), John Awuah, said the repricing of loans has become largely automatic across most banks, particularly after the GRR was revised downwards to 15.68 per cent, effective January 7, 2026.
According to him, the reductions mainly affect customers whose facilities were negotiated at variable interest rates, as such loans are structured to respond directly to changes in the benchmark rate.
Mr Awuah dismissed concerns that the latest cut in the GRR was insignificant, explaining that the adjustment accurately reflects shifts in the underlying indicators used to compute the rate.
Data from the GAB shows that the GRR declined from 15.9 per cent in December 2025 to 15.68 per cent in January 2026. While some observers have criticised the reduction as modest, Mr Awuah insisted it mirrors the movements in key market variables.
He also rejected suggestions that banks are deliberately delaying or withholding the full impact of the lower reference rate from borrowers.
“The Ghana Reference Rate is not arbitrary. It is a composite rate derived from several indicators. It cannot change unless there are movements in factors such as the monetary policy rate, Treasury bill yields and interbank rates,” he explained.
Mr Awuah further noted that, aside from Treasury bill rates, the GRR recorded one of the sharpest declines among major interest rate indicators over the past year, reflecting broader improvements in monetary conditions.
■ Background
The Ghana Reference Rate, which serves as a benchmark for pricing loans by commercial banks, was reviewed downward on January 7, 2026, from 15.9 per cent to 15.68 per cent.
This followed an earlier decline in December 2025, when the rate eased to 15.9 per cent after the Bank of Ghana reduced the Monetary Policy Rate by 350 basis points to 18 per cent, alongside a slight fall in Treasury bill rates.
Movements in the GRR were mixed earlier in the year. In November 2025, the rate rose marginally to 17.96 per cent from 17.86 per cent, driven by modest increases in Treasury bill and interbank rates. This followed a sharp two-percentage-point drop in October, when the GRR fell from 19.86 per cent in September as part of a broader downward trend.
At the beginning of 2025, the GRR stood at 29.72 per cent. It inched up slightly in February before declining steadily to 19.67 per cent by August 2025, reflecting tightening-to-easing shifts in monetary conditions.
Loans contracted in January 2026 at variable interest rates are expected to be benchmarked against the revised GRR, meaning borrowers should enjoy lower interest costs compared with those prevailing in late 2025.
Author: Edem Latsu Nukafu
Edem Latsu Nukafu, a passionate communications professional dedicated to public relations, journalism, media strategy, and content development. He holds both a Diploma and Bachelor of Arts Degree in Communication Studies (Public Relations) from the University of Media, Arts and Communication – UniMAC-IJ. A member of Ghana Journalists Association (GJA).
