Ghana’s financial sector is preparing for a potential easing of lending rates following expectations that the Ghana Reference Rate (GRR) for February 2026 will decline to about 14.58 per cent.
This would mark a notable reduction from the current rate of 15.68 per cent applicable in January. The anticipated drop has raised cautious optimism among borrowers and businesses who have struggled with elevated interest rates amid tight liquidity conditions.
The projection is based on standard industry calculations that apply key monetary and market indicators used in determining the Ghana Reference Rate. If confirmed, the new rate could influence borrowing costs across the economy in the coming weeks.
Basis for the February GRR Projection
The expected decline in the Ghana Reference Rate is anchored on movements in three core indicators that form the basis of the GRR formula. These include the 91 day Treasury bill rate, the interbank rate, and the Monetary Policy Rate set by the Bank of Ghana.
As at the end of January 2026, the 91 day Treasury bill rate stood at 11.19 per cent, while the interbank rate averaged 14.91 per cent. The Bank of Ghana also reduced its Monetary Policy Rate to 15.5 per cent in its most recent policy decision. Applying these variables to the established GRR formula points to a reduction of about 1.1 percentage points, bringing the February reference rate to an estimated 14.58 per cent.
Market analysts note that if commercial banks do not introduce additional charges or widen their risk premiums, the officially announced Ghana Reference Rate could settle around this projected level.
Role of the Monetary Policy Rate Cut
A key driver of the anticipated decline is the recent cut in the Monetary Policy Rate by the central bank. The Bank of Ghana’s decision to reduce the policy rate to 15.5 per cent was aimed at consolidating disinflation gains while supporting economic recovery.
Since the policy rate is a major input in the computation of the Ghana Reference Rate, its reduction is expected to exert downward pressure on the benchmark lending indicator. Industry players, including commercial banks, are therefore watching closely for the official GRR announcement expected in February following the policy rate adjustment.
Bankers Urge Measured Expectations
Despite the positive outlook, banking industry leaders have urged the public to manage expectations regarding the scale of any reduction in lending rates. The Chief Executive Officer of the Ghana Association of Banks, John Awuah, has stressed that the Ghana Reference Rate is determined by several variables, not solely the policy rate.
According to him, while banks remain committed to reviewing their lending rates once the new GRR is announced, changes may be gradual. He also rejected claims that commercial banks have failed to respond adequately to policy rate cuts, pointing to data from the past year that shows a significant downward movement in the Ghana Reference Rate.
His comments highlight the balance banks must strike between lowering borrowing costs and managing credit risk in an environment still marked by economic uncertainty.
Recent Trends in the Ghana Reference Rate
The Ghana Reference Rate has followed a largely downward trajectory over the past year. The benchmark was last reviewed downward on January 7, 2026, when it was cut from 15.9 per cent in December 2025 to 15.68 per cent.
In December 2025, the rate had fallen to 15.9 per cent following a 350 basis point reduction in the Monetary Policy Rate to 18 per cent, alongside a slight decline in Treasury bill rates. Earlier, in November 2025, the GRR rose marginally to 17.96 per cent due to modest increases in Treasury bill and interbank rates.
The broader trend shows a sharp decline from levels as high as 29.72 per cent in January 2025, easing steadily to below 20 per cent by August of that year. This trajectory reflects the impact of monetary tightening earlier in the cycle and subsequent policy adjustments as inflation pressures moderated.
Implications for Borrowers and Businesses
For borrowers, especially those on variable rate loans, a lower Ghana Reference Rate could translate into modest reductions in interest payments. Loans contracted in January 2026 are likely to be rebenchmarked against the new GRR, while new loans taken in February may benefit directly from the lower reference rate.
Fixed rate loan holders, however, will not be affected by the change. Commercial banks may still apply additional risk margins depending on borrower profiles, meaning the actual reduction in lending rates could vary across institutions.
The potential easing comes at a critical time for businesses, many of which continue to struggle with access to credit. According to the President of the Ghana National Chamber of Commerce and Industry, Stephane Miezan, limited access to financing remains a major challenge, alongside the cost of credit. He has warned that the constrained lending environment has contributed to the collapse of some businesses.
Outlook for Lending Rates
If the Ghana Reference Rate declines as projected, it could help reduce borrowing costs from January 2026 levels that averaged around 22 per cent for many commercial loans. While the expected cut may be modest, it signals continued easing in financial conditions and could support gradual improvements in credit flow to the private sector.
As banks prepare to release the official February Ghana Reference Rate, borrowers and investors alike will be watching closely to see how quickly the projected reduction translates into actual changes in lending rates across the market.
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