Commercial banks in the country are expected to reduce their interest rate by some significant margin in the coming days.

This comes after the Ghana Association of Banks on August 6, 2025, announced a huge cut in the Ghana Reference Rate from 23.69 percent for June to 19.67 percent for August 2025.

Speaking to JOYBUSINESS, Chief Executive of the Ghana Association of Banks John Awuah noted that the development will result in commercial banks adjusting their rates soon to reflect the slash.

Mr. Awuah added that reduction did factor in the 3 percent cut in the policy rate by the Bank of Ghana last week.

The Chief Executive of the Ghana Association of Banks added, “If you have a loan linked to the Ghana Reference Rate, then you should expect your loan to go down by that margin.”

The Ghana Reference Rate

The Bank of Ghana and the Ghana Association of Banks in 2017 launched the Ghana Reference Rate, which was described as a new credit rate to serve as a guide in the setting of interest rates on loans by banks and other financial institutions in the country.

The maiden rate was then pegged at 16.82% for April 2017.

According to the Bank of Ghana, the Ghana Reference Rate (GRR) was expected to help introduce transparency in the setting of lending rates in the country.

The Ghana Reference Rate (GRR) is an outcome of an extensive consultation between the Bank of Ghana and the Ghana Association of Banks to review the exiting Base rate model and develop a new framework for base rate determination.

The GRR influences the interest rates of all financial institutions in the country, and it guides the setting of interest rates on all financial products.

Impact on Loan

There have always been debates about the impact of the policy rate cut on the cost of credit in the country.

Mr. Awuah explained that if the loan was negotiated at a variable rate, then it is likely that the interest rate on a loan will be affected.

He also went ahead to explain that for those who are yet to negotiate a new facility, they are likely to benefit fully from this policy rate cut.