BoG to Reform Ghana Reference Rate in Bid to Cut Lending Rates to 10%

The Bank of Ghana says it will reform the Ghana Reference Rate (GRR) as part of efforts to reduce commercial lending rates to single digits over the next four years.

The announcement was made by Governor Dr. Johnson Pandit Asiama during the launch of the Ghanaian Banker Magazine and the Chartered Institute of Bankers’ (CIB) new initiatives in Accra. The move is part of a broader structural reform agenda aimed at removing long-standing inefficiencies within Ghana’s credit market that have kept the cost of borrowing persistently high.

Dr. Asiama stressed that transforming the lending landscape is crucial to unlocking private sector-led growth and boosting access to finance for businesses and households alike. He explained that the new reform measures will target inefficiencies in credit pricing, improve transparency in lending, and foster a more inclusive financial ecosystem.

“There were skeptics when I recently declared my vision of seeing lending rates down below 10 percent before the end of my four-year tenure,” he remarked, adding that a dedicated committee is already working on the GRR reform.

The Ghana Reference Rate, introduced in 2018, serves as the benchmark interest rate that banks use to price their loans. However, critics have argued that the GRR has failed to respond effectively to falling inflation and monetary policy adjustments, leading to a disconnect between central bank policy and commercial lending behavior.

The BoG believes that a re-calibrated GRR backed by enhanced regulatory oversight and improved market discipline will provide a more accurate basis for loan pricing, enabling fairer and more competitive access to credit.

Stakeholders in the banking sector have welcomed the announcement, viewing it as a bold step toward making credit affordable, particularly for SMEs and emerging entrepreneurs who are often priced out of the current system.

Dr. Asiama reiterated that reducing lending rates is not just a policy target but a necessary intervention to support long-term economic resilience.

“We are dismantling inefficiencies that have stood in the way of businesses for far too long,” he said.

As Ghana navigates a post-recovery growth phase, the central bank’s lending rate reform could prove to be one of the most impactful financial sector shifts in recent years reshaping how capital flows to the real economy.

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