Average Lending Rates to Households and Firms Decline Slightly to 30.79%
The Bank of Ghana, in its 120th Monetary Policy Committee statement, reported a notable rise in the weighted average lending rate on the interbank market, which climbed to 28.84% in August 2024, up from 26.59% a year earlier.
Despite this upward movement, banks’ average lending rates to households and firms eased slightly, falling to 30.79% from 31.78% over the same period, reflecting marginal relief in borrowing costs for the real economy.
In a positive development, private sector credit growth accelerated to 21.7% in August 2024, more than doubling the 10.7% expansion recorded in August 2023.
Adjusted for inflation, credit to the private sector grew by 1.1%, marking a stark reversal from the 21.0% contraction experienced the previous year.
This turnaround points to a recovery in demand for loans and improved lending conditions, driven by a more stable economic outlook.
However, the central bank’s cautious stance on monetary policy, combined with elevated credit risk in the banking sector, continues to pose challenges.
The mixed signals—rising interbank rates alongside declining retail lending rates—suggest that while liquidity remains ample, tightening financial conditions could temper broader credit growth going forward.
