The Ghana Reference Rate (GRR) fell to an unprecedented low of 19.67% in August 2025, signaling reduced credit costs for individuals and businesses.
This benchmark rate used by commercial banks to set lending terms has declined steadily from 29.72% in January, reflecting six months of disinflation and exchange rate stability.
The drop accelerated sharply from July’s 23.69%, driven by cooling inflation, a stable cedi, and the Bank of Ghana’s (BoG) recent 300-basis-point policy rate cut to 25%.
Introduced in 2018 by the BoG and Ghana Association of Banks (GAB), the GRR combines the policy rate, interbank rate, 91-day Treasury bill yield, and banks’ weighted funding costs. Its transparency standardizes loan pricing across the sector.
Economists note the decline signals effective monetary policy transmission but caution that banks may delay passing full benefits to borrowers due to risk premiums or funding expenses.
BoG Governor Dr. Johnson Asiama emphasized the GRR’s role in enhancing credit accessibility. With inflation projected to dip below 11.9% by year-end, further policy rate reductions could extend the GRR’s downward trajectory.
This trend offers relief to SMEs seeking capital, homeowners refinancing mortgages, and consumers pursuing personal loans, potentially stimulating broader economic activity.
