Cost of borrowing generally decreased in 2021 – BoG

Interbank weighted average interest rate decreased to 12.68%, BoG

Average lending rate decreased to 20.04%, BoG

Interest on deposit remain unchanged in 2021, BoG

The Bank of Ghana (BoG) has indicated that the cost of borrowing from financial institutions generally decreased in 2021.

The Summary of Economic and Financial data report of the BoG showed that although the monetary policy rate set by BoG was 14.5 percent as at the end of 2021 and 2020, the interbank weighted average interest rate which was 13.56 percent in 2020 decreased to 12.68 percent in 2021.

This implies the average cost of banks borrowing money among themselves decreased from 13.6 percent to 12.68 percent in December 2021.

Also, in the credit market, the average lending rate decreased slightly from the 21.10 percent rate in December 2020 to 20.04 percent at the end of December 2021.

This implies that averagely the interest paid by individuals on loans from financial institutions slightly decreased on average from 21.10 percent to 20.04 percent in 2021.

The report also showed that interest on deposits remained on changed in 2021 with demand deposit (current accounts) earning 2.63 percent interest same as 2020 and saving deposits earning the same 7.63 percent interest.

Interest on time deposit also remained the same as 2020 with 3-months time deposits gaining 11.5 percent interest and 6-months time deposit earning 10 percent interest.

Government bonds however had mixed performances in 2021 with interest on short term bonds averagely decreasing and that of long-term bonds increasing.

Interest on 91-Day treasury bills decrease from 14.5 percent to 12.49 percent in 2021; 182-Day treasury bills also decrease from 14.13 percent to 13.19 percent; 2-Year bonds from increased from 18.50 percent to 19.75 percent and 5-year bonds also increase from 19.85 percent to 21.00 percent.

Read full report from the BoG below (page 3):