Lending rates are expected to drop from significant highs of 28% to sub-20% levels on average in 2025.
This is due to a dovish monetary policy environment brewing in the second half of 2025.
According to Databank Research, it believes a steady disinflation trend towards the Bank of Ghana’s target band of 8% ± 200 basis points will most likely trigger a 200 basis points cut in November 2025.
It maintained its 12% ± 200 basis points inflation target, with a bias towards the lower bound of 10%. “Easing international crude oil prices, a relatively stable cedi, and improved supply of key staples during quarter 3’s peak harvest season are expected to reinforce disinflationary pressures, all things being equal”, it pointed out.
Additionally, it said further cuts in the benchmark rate are expected to anchor the Ghana Reference Rate below 19% by year-end, improving borrowing costs and stimulating economic activity, with the Composite Index of Economic Activity (CIEA) projected to rise to 2.5% from 1.5% in 2024.
It also expects only a modest decline in the Non-Performing Loan ratio from 23% to 21%, as legacy high-interest loans continue to constrain repayment capacity in the near term.
However, sustained monetary easing and gradual income recovery could support asset quality, further strengthening banks’ financial soundness indicators.
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