Banks reduces base lending rates
By Kofi Ahovi
A total of 14out of the 26 commercial banks operating in the country have slashed down their base lending rates, in response to the policy rate cut by the central bank.
Agricultural Development Bank (ADB) has the lowest base rate so far reducing it rate from 28.5% to24.75% representing a 3.75% reduction.
Ghana Commercial Bank (GCB), Standard Chartered Bank (SCB), Unibank, and Ecobank have reduced their respective base lending rates to settle at 28.7%, 25.5%, 28.5% and 26.5% respectively. SGSSB 25.7% and Zenith Bank 29.5%. Amal Bank too has reduced its rate from 29.75% to 27.75 representing a 2% reduction
The rest are HFC Bank, which reduced its rate from 31.5% to 29.75% representing a reduction of 1.75 percentage points, while United Bank for Africa (UBA) also reduced its rate from 29% to 27% representing a 2% reduction and Stanbic Bank from 29.7 to 26.7% representing 3% reduction. Guarantee Trust Bank (GTB) from 32% to 27.5% representing 4.5% reduction.
CAL Bank reduced its rate from 31.9% to 29% a reduction of 2.9%.
More banks are expected to cut down and announce their base lending rates this week.
The reduction in the base lending rates of the commercial banks is in response to the policy rate cut by the central bank about a fortnight ago.
The Monetary Policy Committee of the central bank reduced its policy rate, formerly prime rate to 16% from 18%, being the highest reduction in almost three years.
The policy rate is the rate at which the central bank does overnight lending to the universal banks, which serves as a guide for the various banks to set their respective base lending rates, at which they lend to their most favoured customers.
Interest rates have started easing significantly in the country. Between October 2009 and mid-February 2010, the benchmark 91-day treasury bill went down by 8.4% to 17.4%. Similarly, the 182-day treasury bill rate also declined by 10% to 18.7%.
The rate on the 1-year note fell by 3% to 18%, while the 2-year fixed rate note went down by 6.5% to 19%. On the interbank market, the average overnight interbank rates fell by 2.7% to 16.2% between October 2009 and February 2010.
According to the central bank governor, Kwesi Amissah-Arthur, commercial banks’ base rates have remained largely unchanged despite the sharp declines observed in the treasury bill rates. The average base and lending rates have remained sticky at around 32%.
By Kofi Ahovi
A total of 14out of the 26 commercial banks operating in the country have slashed down their base lending rates, in response to the policy rate cut by the central bank.
Agricultural Development Bank (ADB) has the lowest base rate so far reducing it rate from 28.5% to24.75% representing a 3.75% reduction.
Ghana Commercial Bank (GCB), Standard Chartered Bank (SCB), Unibank, and Ecobank have reduced their respective base lending rates to settle at 28.7%, 25.5%, 28.5% and 26.5% respectively. SGSSB 25.7% and Zenith Bank 29.5%. Amal Bank too has reduced its rate from 29.75% to 27.75 representing a 2% reduction
The rest are HFC Bank, which reduced its rate from 31.5% to 29.75% representing a reduction of 1.75 percentage points, while United Bank for Africa (UBA) also reduced its rate from 29% to 27% representing a 2% reduction and Stanbic Bank from 29.7 to 26.7% representing 3% reduction. Guarantee Trust Bank (GTB) from 32% to 27.5% representing 4.5% reduction.
CAL Bank reduced its rate from 31.9% to 29% a reduction of 2.9%.
More banks are expected to cut down and announce their base lending rates this week.
The reduction in the base lending rates of the commercial banks is in response to the policy rate cut by the central bank about a fortnight ago.
The Monetary Policy Committee of the central bank reduced its policy rate, formerly prime rate to 16% from 18%, being the highest reduction in almost three years.
The policy rate is the rate at which the central bank does overnight lending to the universal banks, which serves as a guide for the various banks to set their respective base lending rates, at which they lend to their most favoured customers.
Interest rates have started easing significantly in the country. Between October 2009 and mid-February 2010, the benchmark 91-day treasury bill went down by 8.4% to 17.4%. Similarly, the 182-day treasury bill rate also declined by 10% to 18.7%.
The rate on the 1-year note fell by 3% to 18%, while the 2-year fixed rate note went down by 6.5% to 19%. On the interbank market, the average overnight interbank rates fell by 2.7% to 16.2% between October 2009 and February 2010.
According to the central bank governor, Kwesi Amissah-Arthur, commercial banks’ base rates have remained largely unchanged despite the sharp declines observed in the treasury bill rates. The average base and lending rates have remained sticky at around 32%.
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