Latest figures from the Bank of Ghana (BoG) shows that the average lending rate has dropped to 21.10% within the last one year.
It fell by 2.59% as compared to the same period in 2019.
But, between October 2020 and December 2020, the interest charged on loans went down by 0.16%.
Though this is a good development, the cost of borrowing is still high compared to the nation’s peers on the African continent such as Burkina Faso, Togo Côte d’Ivoire, Mali etc.
The BoG data reveals that Ghana’s reference rate has fallen by 1.34% within the last one year, from 16.11% in December 2019 to 14.77% in December 2020.
The average lending rate which is also known as the cost of credit varies among the commercial banks, as they price their rate based on somewhat different parameters.
Some banks offer as low as 17% for lending, whilst others have rates as high as about 28%.
Government of Ghana securities rates have also recorded a marginal drop.
Fitch Solutions forecasts ease in Ghana’s interest rates
The research arm of ratings agency, Fitch, earlier forecasted an ease in interest rates in the country, from early next year.
It linked that to a further fall in the country’s inflation rate next year, which then will remain in the single-digit bracket. It is projecting end-year inflation of 8.5% for 2021.