Barely hours after The Bank of Ghana announced its decision on September 24 to leave the Monetary Policy Rate (MPR) unchanged at 14 percent for at least the next two months, several commercial banks in Ghana had instituted reviews of their current interest rates structure and had started considerations as to what may need changing.

Although the retention of the MPR at 14 percent means any upcoming changes by commercial banks will be marginal rather than large, some banks can be expected to adjust selected loan and deposit rates over the next week or fortnight as they respond to movements in their own funding costs, the Ghana Reference Rate (GRR), Treasury-bill yields, liquidity conditions and competitive pressures.

“It is instructive that the MPR is one input into bank pricing, rather than a legally fixed retail price for loans and deposits,” noted one bank treasurer just after the latest Monetary Policy Committee (MPC) decision came through. “Now it is time to consider the other inputs, based on our specific circumstances, especially with regards to lending rates.”

The strongest immediate argument for lower lending rates comes from the GRR he pointed out. The September GRR fell to 10.18 percent, from 10.61 percent in August, a decline of 43 basis points. Importantly, that decline occurred even though the MPR was unchanged. The principal drivers were lower Treasury-bill and interbank rates.

This illustrates why a 14 percent MPR does not automatically prevent commercial banks from changing their pricing.

banner Money-market rates are doing some of the work

The latest Treasury-bill data reinforces this point. At the September 21 auction, the effective interest rate on the 91-day bill was 4.694 percent, while the 182-day and 364-day bills yielded 6.489 percent and 9.982 percent, respectively. The 364-day rate was therefore several percentage points below the 14 percent policy rate.

“For banks that are significant buyers of government securities, these lower risk-free yields alter the opportunity cost of holding liquidity,” the bank treasurer explained. “They also influence the return banks require from alternative assets, including corporate and retail loans.”

At the same time, competition for good-quality borrowers is becoming increasingly important. The GRR’s decline has already been accompanied by reports of average lending rates around 15 percent, with some highly rated customers reportedly obtaining loans at 11–12.5 percent.

That creates an incentive for banks with excess liquidity or relatively low funding costs to cut selected lending rates rather than lose attractive customers to competitors.

But the adjustment will not be uniform

The most likely development, however will be selective rather than across-the-board re-pricing.

Banks do not all have identical liability structures, commercial bankers point out. A bank funded heavily by low-cost current and savings accounts can afford to reduce loan rates more aggressively than one dependent on relatively expensive fixed deposits. Similarly, a bank seeking to expand its loan book may sacrifice some margin to win corporate, SME or consumer business.

There is also a timing issue. The September MPR decision is unlikely to cause every bank to rewrite its pricing immediately. Instead, treasury and asset-liability committees will assess the decision alongside the latest GRR, interbank rates, deposit mobilization trends, liquidity buffers and competitive offers, a process which is already starting in some banks.

This makes the next seven to 14 days a likely window for incremental changes.

“Banks which cut selected lending rates will reduce them by an average 15–30 basis points, with about 20 basis points the most plausible industry-wide adjustment among banks that actually re-price” the bank treasurer tentatively predicts, understandably insisting on anonymity while sticking his neck out.

“For particularly competitive corporate and SME facilities, reductions could reach 30–50 basis points, especially where existing loan pricing incorporates a sizeable margin above the GRR.”

Deposit pricing presents a more complicated picture.

The lower Treasury-bill yields reduce the return available to banks from investing surplus liquidity in government securities. That might normally encourage banks to reduce deposit rates. But banks also need deposits to support credit expansion and maintain liquidity buffers.

Consequently, banks experiencing strong deposit growth may have room to cut selected term-deposit rates by 10–25 basis points.

Conversely though, other banks, however, could actually raise deposit rates by 10–25 basis points on selected products if they are pursuing increased liquidity or market-share objectives. A bank seeking to attract pension-related, corporate or high-net-worth deposits, for example, may deliberately offer a higher rate even when the general interest-rate environment is stable.

Thus, the expected average movement across the industry is likely to be much smaller than the upward or downward movement experienced by individual products.

The margin factor

The underlying economics are also important.

Average commercial lending rates in Ghana declined significantly from roughly 29.22 percent in mid-2025 to about 20.65 percent (and lower for prime benchmarks) by mid-2026. Net interest margins and overall spreads compressed as policy easing lowered both borrowing costs and yields on money market instruments.

That means banks now face a strategic choice: preserve margins or pass some of the improvement in funding and benchmark conditions to customers.

The fact that commercial lending rates had already fallen to 15.64 percent in June, their lowest level in more than a year, demonstrates how far lending costs have already adjusted during the easing cycle.

Banking sector analysts therefore do not expect another major downward re-pricing immediately after the September 24 decision. The unchanged MPR, together with renewed inflation and external-price risks, gives banks little reason to make aggressive cuts.

Instead, they assert that most probable pattern over the next fortnight is marginal reductions in selected variable rate loans and in competitive corporate and SME loans offered to reliable borrowers.

With regards to deposits, the initial prediction is that rates offered on some targeted high-value deposits may rise a notch but there will be no significant change for most fixed term deposits or for ordinary savings accounts.

“The important distinction is that the MPC’s 14 percent decision establishes the monetary-policy anchor, but market rates determine the transmission into individual bank balance sheets” explains the treasurer. “With the GRR already down 43 basis points in September and Treasury yields substantially below the MPR, some banks have room to adjust pricing even without another policy-rate cut.”

On the other hand though headline inflation ticked up slightly to 5.0 percent in August. Indeed, the MPC explicitly flagged structural risks like rising utility tariffs and global crude oil supply disruptions.

Banks price long-term fixed loans or negotiate large deposits based on where they expect inflation to be in six to 12 months, not just today. Over the next fortnight, banks that anticipate slightly higher cost-push inflation may preemptively refuse to lower their fixed lending rates, keeping a larger buffer intact despite the BoG’s steady hand.

The likely result is therefore a modest, differentiated re-pricing rather than a sector-wide rate reduction, roughly 20 basis points lower for selected loans, while deposit adjustments are likely to be smaller and more dependent on each bank’s liquidity and competitive position.