The Ghana Association of Banks (GAB) has announced a reduction in the Ghana Reference Rate (GRR) to 17.86% for October 2025, down from 19.86% in September.

The two-percentage-point decline is expected to influence lending and borrowing costs across the banking sector.

At the start of the year, the GRR stood at 29.72%, rising slightly to 29.96% in February before steadily dropping over the past six months to 19.67% in August.

Industry analysts have linked the latest cut to a consistent decline in key economic variables such as inflation, treasury bill yields, and most notably, the Bank of Ghana’s policy rate, which has been slashed by over 600 basis points to 21.5%.

According to the Bank of Ghana’s recent Monetary Policy Report, average lending rates have eased from 26.6% to 24.2%.

Yields on money market instruments are also trending downward. The 91-day treasury bill rate, for instance, fell from 13.4% at the end of July 2025 to 10.3% in August.

The cut in the GRR could provide relief for businesses with variable-rate loans, which may be reviewed in line with the decline.

New borrowers are also expected to benefit from lower lending costs as commercial banks adjust their rates.

The GRR, introduced in 2017 by the Bank of Ghana and GAB, was designed to improve transparency in loan pricing and guide banks in setting interest rates.

The maiden rate was pegged at 16.82% in April 2017.

By influencing lending costs, the GRR remains a key benchmark for shaping credit conditions and financial products across Ghana’s banking sector.