Lending Rates Ease as Treasury Bill Rates Slide to 11%
Ghana’s domestic interest rate environment eased significantly in the year to April 2026, with Treasury bill yields, interbank rates and average lending rates all declining sharply as inflation fell and monetary policy shifted from crisis tightening to cautious easing.
According to the Bank of Ghana’s May 2026 Summary of Economic and Financial Data, the Monetary Policy Rate stood at 14.0 per cent in April 2026, down from 28.0 per cent in April 2025, marking a major reduction in the central bank’s policy stance over the period. The interbank weighted average rate also dropped strongly, falling from 26.92 per cent in April 2025 to 10.36 per cent in April 2026. This suggests that liquidity conditions in the banking system have improved considerably, with short-term funding costs between banks declining in line with the broader disinflation trend.
The sharpest movement was seen in the short end of the domestic money market. The 91-day Treasury bill rate fell from 15.47 per cent in April 2025 to 4.90 per cent in April 2026, while the 182-day bill declined from 16.23 per cent to 6.84 per cent. The 364-day bill also dropped from 18.62 per cent to 10.02 per cent over the same period.
The decline in Treasury bill rates represents a significant reset in the government’s domestic borrowing conditions. For the state, lower yields reduce the cost of rolling over short-term debt and create room for improved fiscal management. For investors, however, the fall means returns on risk-free instruments have compressed sharply, forcing a reassessment of portfolio strategy.
The lower yield environment has also begun to transmit into the credit market. Average lending rates declined from 27.40 per cent in April 2025 to 16.33 per cent in April 2026, while the Ghana Reference Rate fell from 23.99 per cent to 10.06 per cent.
This is important for businesses and households because the Ghana Reference Rate serves as the base rate for pricing loans and is determined by the weighted average of the 91-day Treasury bill rate, the Monetary Policy Rate and the interbank overnight rate.
The data therefore point to a broader easing cycle across the domestic market: the central bank’s policy rate is down, interbank funding is cheaper, Treasury bill yields have fallen, and bank lending rates are beginning to adjust.
Still, the pace of transmission remains a key issue. Even though average lending rates have dropped by more than 11 percentage points over the period, borrowing costs remain high for many businesses, especially small and medium-sized enterprises facing collateral constraints, credit-risk premiums and legacy balance-sheet weaknesses.
Deposit rates have not moved with the same intensity. Demand deposit rates declined from 2.63 per cent in April 2025 to 1.51 per cent in April 2026, while savings deposit rates fell from 5.00 per cent to 4.01 per cent. Three-month and six-month time deposit rates remained unchanged at 10.50 per cent throughout the period.
This means savers are receiving lower returns on ordinary deposits, while fixed-term deposits remain relatively more attractive compared with Treasury bills at the short end of the curve. The gap between falling government securities yields and sticky time deposit rates could influence how banks compete for deposits in the months ahead.
The secondary bond market also showed a broad decline in yields, particularly for post-Domestic Debt Exchange Programme bonds. The 4-year post-DDEP bond yield fell from 21.21 per cent in April 2025 to 10.27 per cent in April 2026, while the 5-year bond declined from 20.70 per cent to 9.64 per cent. The 10-year bond yield also dropped from 22.02 per cent to 12.49 per cent.
The moderation in secondary-market yields suggests improved investor confidence in domestic government securities, although the bond market remains sensitive to fiscal credibility, inflation expectations and the government’s ability to avoid renewed debt distress.
The fall in rates has also coincided with stronger private-sector credit growth. Nominal private-sector credit grew by 28.7 per cent year-on-year in April 2026, while real private-sector credit expanded by 24.5 per cent, indicating that lower inflation and easing interest rates are beginning to support credit recovery.
The domestic market story, therefore, is one of a major interest rate reset. Ghana has moved from a high-rate stabilisation environment into a lower-yield recovery phase. That shift has implications for government financing, bank profitability, business borrowing, investor returns and capital market flows.
For the government, lower yields are positive because they reduce the cost of domestic borrowing. For businesses, the benefit depends on how quickly banks lower loan pricing and expand credit. For investors, the compression in Treasury bill yields may push more funds into equities, corporate debt, fixed deposits and longer-dated securities.
The risk, however, is that the easing cycle could be tested if exchange-rate pressures and higher oil prices reignite inflation expectations. The cedi had depreciated by 8.4 per cent against the US dollar by mid-May 2026, while Brent crude oil had risen sharply to $103.2 per barrel in April, both of which could complicate the interest-rate outlook if they feed into domestic prices.
