Interest Rates Drop by 23% Since January 2025 – Databank Report
By Praisebell Rosemond Larbi
Interest rates in Ghana have declined significantly since the beginning of 2025, signalling the likelihood of further reductions in lending rates. However, analysts warn that market pressures could resurface in the coming months.
According to a market outlook report by Databank Research, interest rates have dropped by 23.7 percent since January 2025, reflecting improved policy signals and stronger government expenditure controls.
The report noted that the pace of easing in rates slowed between the second and third quarters of 2025, with yields stabilising within a 10.40 percent to 10.90 percent corridor during that period.
Possible Rise in Short-Term Yields
Despite the downward trend in rates, the report cautioned that short-term yields may begin to firm up again in early 2026.
“Looking ahead, we expect a gradual firming of yields in the first quarter of 2026, with short-term rates projected to rise by 50 to 60 basis points from fourth-quarter 2025 levels,” the report stated.
This anticipated increase is expected to be driven by higher government debt issuance and tighter liquidity conditions within the financial system.
Analysts also warned that market pressures could intensify later in the year as investors reassess the government’s fiscal consolidation efforts beyond the country’s programme with the International Monetary Fund (IMF).
According to the report, this reassessment could potentially push 91-day and 182-day treasury bill rates towards the 14 percent to 18 percent range by the end of the second quarter of 2026.
Recovery Expected in Secondary Bond Market
The report further projected that the secondary bond market will continue its recovery trajectory into 2026.
This outlook is expected to be supported by improving market turnover and reinforced fiscal discipline by the government.
However, Ghana faces significant domestic debt service obligations in the coming years.
Between 2026 and 2028, the country is expected to service about GH¢131.8 billion in domestic debt, including cumulative redemptions of approximately GH¢65 billion in 2027 and 2028.
These obligations present potential refinancing pressures for the government.
Fresh Bond Issuance to Ease Pressure
To manage these pressures, the report suggested that the government may undertake fresh bond issuances, including the reopening or “retap” of selected securities issued under the Domestic Debt Exchange Programme (DDEP).
Such controlled reopenings could help smooth the country’s debt maturity profile and reduce refinancing risks.
Databank Research also noted that trading activity in the bond market has improved considerably.
Cumulative market turnover reached GH¢1.07 trillion as of September 2025, signalling a return to liquidity conditions similar to those experienced before the debt exchange programme.
This marks a substantial increase compared to the GH¢5.2 billion turnover recorded a decade earlier, highlighting a major improvement in investor participation.
IMF Programme Remains Key Anchor
The report emphasised that Ghana’s ongoing Extended Credit Facility (ECF) programme with the IMF, which is scheduled to end in June 2026, remains a critical policy anchor.
According to analysts, the programme is expected to support yield stability as the government gradually returns to the domestic bond market to meet its financing needs.
Overall, Databank Research expects the market to begin 2026 on a positive and constructive trajectory, but cautioned that sustaining these gains will depend largely on the government’s commitment to credible reforms and disciplined fiscal management.
