Commercial lending rates fell to 15.64 per cent in June 2026, their lowest level in more than a year, extending one of the sharpest reductions in financing costs in recent history.
But the rebound in Treasury bill and government bond yields suggests financial markets are beginning to question how much further the easing cycle can run.
The latest Summary of Economic and Financial Data released by the Bank of Ghana shows the average lending rate dropped from 27.00 per cent in June last year, reducing the cost of bank credit by 11.36 percentage points within 12 months.
The Ghana Reference Rate, the benchmark used by commercial banks to price loans, also declined sharply to 10.02 per cent from 23.80 per cent over the same period, reflecting the broad easing in monetary conditions.
The figures illustrate how aggressively lower policy rates have filtered through to the banking sector after more than a year of monetary easing aimed at restoring growth following Ghana's economic stabilisation.
For businesses, the shift marks a dramatic improvement in financing conditions.
Companies that postponed expansion plans during the period of prohibitively expensive credit are increasingly finding bank financing more affordable, while households are also benefiting from lower borrowing costs.
Yet beneath the improving credit environment, government debt markets are beginning to tell a more cautious story.
Monetary easing reaches real economy
The fall in lending rates has been underpinned by one of the most aggressive reductions in Ghana's policy rate in recent years.
The Bank of Ghana lowered its benchmark rate from 28 per cent in June 2025 to 14 per cent by March this year through successive reductions as inflation retreated sharply and macroeconomic stability improved.
The policy rate remained unchanged at 14 per cent in June, signalling that policymakers believe monetary conditions are approaching a more neutral setting.
The weighted average overnight interbank rate declined to 10.24 per cent in June from 27.02 per cent a year earlier, reducing banks' short-term funding costs and creating room for lenders to cut loan pricing.
The transmission mechanism has been unusually effective. Average lending rates have fallen steadily from 20.58 per cent in January to 19.17 per cent in February, 17.74 per cent in March, 16.33 per cent in April, 15.83 per cent in May and 15.64 per cent in June.
However, the pace of decline has slowed markedly over recent months.
The Ghana Reference Rate has also stabilised, easing only marginally from 10.06 per cent in April to 10.03 per cent in May and 10.02 per cent in June.
The flattening trend suggests the easy gains from monetary easing may already have been realised.
Bond market changes direction
The more significant development is unfolding in the government securities market.
Treasury bill yields, which had fallen rapidly during the first quarter of the year, reversed course in the second quarter.
The benchmark 91-day bill increased to 5.27 per cent in June from 4.89 per cent in March.
The 182-day bill climbed to 7.21 per cent from 6.51 per cent over the same period, while the 364-day bill rose sharply to 11.29 per cent from 9.57 per cent.
The steepest increase occurred at the longer end of the Treasury bill market, suggesting investors are demanding greater compensation for locking in funds over extended periods.
Secondary bond market
Yields on post-Domestic Debt Exchange Programme bonds increased across most maturities in June.
The five-year bond yield jumped to 13.00 per cent from 9.80 per cent a month earlier, while the six-year bond rose to 12.84 per cent from 10.56 per cent.
Longer-dated securities also recorded higher yields, with the 10-year bond reaching 14.33 per cent and the 12-year bond 14.92 per cent.
Although current yields remain well below those prevailing a year ago, the broad-based increase indicates that investors are reassessing the returns required to hold government debt.
The Bank of Ghana offered no specific explanation for the shift, but it coincided with a rise in headline inflation to 5.30 per cent in June from 3.70 per cent in May.
Even though inflation remains historically low, the increase may have influenced expectations about future real returns, particularly in short-term government securities.
Banks face new balancing act
For commercial banks, the changing interest-rate environment presents both opportunities and challenges.
While lending rates have fallen sharply, deposit rates have remained largely unchanged.
The average savings rate held at 5.00 per cent in June, while three-month and six-month time deposit rates remained at 10.50 per cent.
Demand deposit rates fell to 1.12 per cent from 2.63 per cent a year earlier.
Stable deposit costs have helped banks adjust to lower lending rates without an immediate squeeze on margins.
But if government security yields continue to rise while lending rates remain under downward pressure, lenders could face a more difficult pricing environment in the months ahead.
That may encourage banks to rely more heavily on transaction banking, digital services and fee-based income to sustain profitability rather than depending solely on interest income.
Borrowers, meanwhile, continue to benefit from the most favourable credit conditions in more than a year.
Even so, the published average lending rate remains only a benchmark. Individual borrowers continue to pay different rates depending on their creditworthiness, collateral, industry and repayment history.
The broader direction of interest rates during the second half of 2026 is therefore becoming less certain.
Monetary easing has succeeded in lowering borrowing costs and improving liquidity across the financial system.
But the recent rebound in Treasury bill and government bond yields suggests financial markets are becoming more cautious about the outlook for inflation, government borrowing and longer-term interest rates.
The result is an economy entering a new phase of the rate cycle. Credit is significantly cheaper than it was a year ago, but further reductions may prove slower and harder to achieve unless inflation remains contained and fiscal conditions continue to improve.