Cost of borrowing is expected to rise in the coming months, following the increase in the policy rate to 27% by the Bank of Ghana
The Central Bank adjusted upwards its key lending rate by 2.5 percentage points, citing risks to inflation and growth outlook.
Businesses and households will therefore have to brace themselves as the cost of doing business and living will intensify.
Already, the average lending rate is estimated at 31.40%.
However, the average lending rate varies among the banks and the respective sectors that they lend to. Some banks will offer loans equivalent to the Ghana Reference Rate of 27.44%, whilst others will charge rates as high as 40%.
Interest rates on the money markets have trended upwards across the spectrum of the yield curve, in line with the tightening of the monetary policy stance.
At the short-end of the market, the 91-day and 182-day Treasury bill rates increased to 31.53% and 32.61% respectively, in October 2022, from 12.46% and 13.16%, in the same period of 2021. Similarly, the rate on the 364-day bill increased to 32.32% percent from 16.24% over the review period.
On the secondary market, rates on all bonds, from 2 years through to 20 years, almost doubled over the one-year review period.
Banks record 17% increase in profit to ¢4.4bn
The banking sector recorded a profit-after-tax of ¢4.4 billion for the first ten months of 2022.
This represents an increase of 17.2%, compared with 10.0% growth during the same period last year.
According to the Bank of Ghana, the banking sector recorded strong asset growth and improved profitability over the review period, but there are strong signs of emerging spillover effects from the recent macroeconomic challenges.
Net interest income grew by 22.7% to GH¢12.8 billion, higher than the 15.2% growth.
Net fees and commissions also grew by 25.4% to GH¢2.9 billion, compared with 22.9% growth over the same comparative period. Operating income accordingly rose by 27%, higher than the corresponding growth of 14.3% in 2021.
Source: Business Analyst