By: Fred Yaw Sarpong
Statistics from the Bank of Ghana (BoG) has revealed that interest rate charged on loans and credit advances and interest paid on deposits by banks have reduced to 26.9 per cent and 11.6 per cent respectively.
According to the BoG, Annual Percentage Rates (APR) of interest charged on loans and credit advances was 26.9 per cent, a drop of 0.7 percent from the 27.6 percent recorded for the month of January.
Meanwhile, average Interest (AI) paid on deposits by banks reduced from 11.9 percent as at January 31st, 2017 to 11.6 percent during the reporting period.
A statement from the central bank said the reduction covers 31 banks. The central bank said this data is based on figures available as at 28th February, 2017.
The bank said the APR is the true interest rate banks and non-bank financial institutions charge the public on loans and advances.
“It reflects the true cost of borrowing and includes charges and commissions levied by banks,” said BoG.
The statement said average interest paid on deposits is the average interest paid by banks on deposits over the period. Base rate reflects the minimum interest rate that can be charged on loans and advances.
“The publication of these rates is to promote transparency in the pricing and provision of banking services. Bank of Ghana aims to promote accountability of its decision making and build understanding of the monetary policy formulation process among stakeholders through the publication of these documents,” it noted.