The Ghana Reference Rate (GRR), the benchmark used by banks to price loans, has fallen sharply to 15.9% for December 2025, down from 17.93% in November. This marks one of the most significant month-on-month drops recorded this year.

According to fresh data from the Ghana Association of Banks, the more than 200 basis-point decline reflects improvements in key indicators that feed into the GRR formula particularly the Monetary Policy Rate (MPR), Treasury bill yields, and interbank lending rates.

Commercial banks attribute the decline largely to the 350-basis-point cut in the Monetary Policy Rate to 18%, alongside a marginal reduction in Treasury bill rates.

Background to the Latest Movement

The GRR has experienced notable fluctuations throughout 2025:

• November: Increased slightly to 17.96% due to marginal rises in T-bill rates (10.50% to 10.67%) and interbank rates (20.93% to 21%).
• October: Dropped by 2%, falling from 19.86% in September.
• January–August: After peaking at 29.96% in February, the rate declined steadily to 19.67% by August.

The new December figure further strengthens the downward trajectory seen in the second half of the year.

Impact on Borrowing and Lending Rates

Financial analysts expect the latest drop in the GRR to translate into lower lending rates across banks in December. Loans issued during this month will be benchmarked against the updated GRR, meaning borrowers should experience reduced interest payments compared to November.

• Borrowers with fixed-rate products: No effect.
• Borrowers with variable-rate loans: Possible slight adjustments depending on each bank’s internal pricing model.

This decline comes at a time when businesses have faced difficulties accessing credit due to liquidity tightness created by anti-inflationary measures.

The Bank of Ghana’s recent Monetary Policy Report shows average lending rates easing from 26.6% to 24.2%, while short-term money market yields continue to fall. The 91-day Treasury bill rate, for instance, dropped from 13.4% in July to 10.3% in August 2025.

Understanding the Ghana Reference Rate

The GRR was introduced in 2017 by the Bank of Ghana and the Ghana Association of Banks to create a transparent and uniform benchmark for loan pricing. The first GRR, published in April 2017, stood at 16.82%.

The system replaced the old base rate model and remains a central tool used by banks to guide interest rate decisions.GRR is expected to provide relief to businesses battling high borrowing costs amid efforts to stabilise the economy.