Commercial banks raise reference rate
Commercial banks have induced a marginal increase in reference rates, a situation which would see borrowers paying a little bit more in interests on their loans.
In published statements Wednesday some commercial banks indicated that they had increased the reference rate from 13.30 percent in May to 13.40 percent in June.
The statement shows that the banks include Standard Bank and National Bank of Malawi.
Bankers Association of Malawi Chief Executive Officer, Lyness Nkungula attributed the adjustment to a rise in treasury bills rate.
“This month, the increase has been due to rising in Treasury Bill rates, as government’s borrowing appetite has increased,” Nkungula said.
Speaking in a separate interview, an economics Professor from the Chancellor College Ben Kalua said this may also signal tough conditions of business because of the Covid-19 pandemic.
“It may be that the Covid-19 has affected the cost of doing business in the country to the point that the turn over for banks has been negatively affected,” Kalua explained.
In April, Reserve Bank of Malawi’s Monetary Policy Committee maintained the Policy Rate at 13.5 percent.
The central bank initiated different measures aimed at stimulating the economy including slashing Liquidity Reserve Requirement.
The arrangement saw the central bank also pumping K12 billion into the system.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.