Banking industry average base rate falls to 26.7 per cent

The banking industry average base rate as at the end of March stood at 26.7 per cent, data from the Bank of Ghana has shown.

The data indicates a drop of 0.9 per cent in the base rate from the month- end January rate of 27.6 per cent.

The data is contained in the Central Bank’s latest data on Annual Percentage Rates (APR) of interest charged on loans and credit advances and the Average Interest (AI) paid on deposits by banks released on Wednesday.

On monthly basis, the data showed a marginal fall of 0.2 per cent from the 26.9 per cent recorded at the end of February.

At 11.2 per cent as at March 31, 2017, the average deposit rate represents a drop of 0.4 per cent from the 11.6 per cent recorded at the end of February.

In January, the average deposit rate was 11.9 per cent, giving a year-to-date (March 31, 2017) drop of 0.7 per cent.

In all, the list covers 31 banks.

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. 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 Bank of Ghana said the publication of the rates was to promote transparency in the pricing and provision of banking services.

Bank of Ghana aims at promoting accountability of its decision making and builds understanding of the monetary policy formulation process among stakeholders through the publication of these documents.