But between October 2020 and December 2020, interest charged on loans went down by 0.16%.
Though the cost of borrowing is still high compared to the nation’s peers on the African continent, it has gone down by about 10% since Dr. Ernest Addison’s administration took over the reins of Bank of Ghana.
According to the data from the Bank of Ghana, 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 cost of credit however varies among the commercial banks, as they price their rate based on their risk analysis and also the risk of customers.
Some banks offer as low as 17% for lending, whilst others have rates as high as about 28%.
When it comes to interest rates on Government of Ghana securities, the rates have also dropped but marginally.
For instance, the yield on 91-day Treasury bill has fallen by 0.61% in December 2019 to 14.08% in December 2020.
Also, interest on the 182-day T-Bill has dropped by 1.02% in the last one year to 14.13% in December 2020.
Fitch Solutions forecasts ease in Ghana’s interest rates
Research arm of rating agency, Fitch, earlier forecast 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 an end-year inflation of 8.5% for 2021.
Senior Country Risk Analyst for Sub Saharan Africa, William Attwell told Joy Business a further drop in inflation will trigger monetary policy easing and interest rates.
“We would expect monetary policy easing during 2021 because of a further fall in inflation. We’re expecting inflation to ease further next year and that will facilitate that process too. That’s really an austere on the monetary front for Ghana”