Interest rates development continues to reflect more expansionary monetary policy environment – BoG
Interest rate developments in August 2026 continued to reflect the more expansionary monetary policy environment in the second half of 2025.
Relative to August 2025, policy and market interest rates declined, consistent with the easing of inflationary pressures and improved macroeconomic conditions.
According to the Bank of Ghana, real interest rates, however, remained positive during the period under review.
The Monetary Policy Rate declined to 14.0% from 25.0% in August 2025. The reduction in the policy rate by 11 percentage points reflected the cumulative monetary easing undertaken by the Bank of Ghana in response to the moderation in inflation during the review period, as well as improvements in macroeconomic fundamentals.
The corresponding downward adjustment in the Interbank Weighted Average Rate (IWAR) reinforced the easing of the monetary policy stance. The IWAR declined to 10.2% in August 2026 from 23.3% a year earlier.
Similarly, the average lending rate of banks eased to 15.9% from 24.2% in August 2025, reflecting a pass-through effect of the reduction in the policy rate to market rates.
Meanwhile, real interest rates remained broadly positive during the review period, reflecting the faster pace of disinflation relative to the decline in nominal interest rates.
Developments in the Treasury bill market were consistent with the general decline in interest rates.
The 91-day, 182-day, and 364-day Treasury bill rates declined sharply to 5.4%, 7.3% and 12.2%, respectively, compared with 10.3%, 12.3% and 13.1 percent, a year earlier.
According to the Central Bank, this decline reflected sustained investor demand at the short end of the curve, improved inflation expectations, and ongoing efforts by the government to reduce domestic financing costs.
Rates on medium- to long-term government securities, such as the 2-year, 3-year, 5-year, 6-year, 7-year, 10-year, 15-year and 20-year bonds, however, remained broadly unchanged, given limited activity in that segment of the market.
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