Bank of Ghana holds policy rate at 14% as lending costs fall sharply

Pinned summary · as of 14:55

The Bank of Ghana held its benchmark interest rate at 14% in late September after cutting it repeatedly through the year, as lending rates available to customers fell steeply. However, the central bank cautioned that the link between its own rate decisions and what banks charge businesses and households is neither direct nor immediate.

What we know

• Average lending rates in Ghana's banking sector fell to 15.9% in August 2026, compared with 24.2% a year earlier, according to the Bank of Ghana.

What's disputed / unconfirmed

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  The Bank of Ghana said lending rates are falling as a result of its rate cuts being passed through the banking system; MyJoyOnline and The Ghana Report note the central bank made this claim but do not provide independent confirmation of the transmission mechanism.
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  The Bank of Ghana cautioned that credit risk remains elevated in the banking sector despite falling bad-loan ratios, a warning that conflicts somewhat with the reported improvement in asset quality.
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  The Monetary Policy Committee kept the policy rate at 14% at its 132nd meeting on 23 and 24 September 2026.
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  The bank's assets grew by 20.5% in the year to August 2026, reaching GH₵500.2 billion.
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  Bad loans across the system fell sharply to 15.7% of the portfolio in August 2026 from 20.8% the previous year.
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  The banking sector's capital adequacy ratio strengthened to 19.1% in August 2026 from 18.3% a year earlier.
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  The Bank of Ghana stated that lower policy rates do not automatically result in lower borrowing costs, and that the chain from its decisions to cheaper loans for businesses and households depends heavily on how the banking system acts on them.
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  When setting loan prices, banks weigh their funding costs, credit risk, staff and infrastructure costs, the capital they must hold, expected loan losses and broader economic conditions, according to Dr Simon Harvey, the Bank of Ghana's Director of Research.
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  The Bank of Ghana stressed that monetary policy's true measure is its effect on lending and deposit rates, credit availability, business investment, household spending, employment and overall economic activity, not simply the benchmark rate itself.

Why it matters for Ghana

Lending rates affect what Ghanaians and businesses pay to borrow. When rates fall, smaller traders, farmers and households can access cheaper credit to invest or cover costs, which can boost consumption and production across markets in Accra, Kumasi, Takoradi and other cities. However, if banks do not pass the central bank's lower rates fully to customers, the benefit will be limited. The central bank's warnings about credit growth and asset quality also matter: they signal that regulators are watching whether banks lend responsibly, which protects savers' deposits and the stability of the financial system.