At the end of October 2022, the average interest rate on loans provided by banks to individuals and businesses in the nation was 31.4%. This is because increases in the policy rate of the Bank of Ghana cause the Ghana Reference Rate (GRR) and risk assessment fees for borrowers to rise.
When compared to the 20.34 percent average lending rate at the end of October 2021, the increase in the average lending rate represents an 11% (1,100bps) year-over-year (YoY) increase in interest rates.
The Ghana Reference Rate and the Bank of Ghana’s (BoG) benchmark monetary policy rates are what primarily account for the 11,000 basis point increase in the average lending rate (GRR).
This is the fifth straight increase in 2022, in order to curb strong inflationary pressures and support the cedi which depreciated by 54 per cent against the dollar in the year to November.