National Bank of Malawi (NBM) has become the first commercial bank to react to last week’s increase in the policy interest rate from 25 to 27 by the Reserve Bank of Malawi (RBM).
NBM yesterday announced an immediate increase in its base lending rate from 32 percent to 34 percent.
“This follows the Monetary Policy Committee (MPC) decision to raise the policy rate from 25 percent to 27 percent,” says NBM in a brief statement issued Tuesday.
The MPC resolved to raise the base lending rate, the rate which the central bank charge to commercial banks, from 25 percent to 27 percent following what they call prevailing micro economic indicators.
The MPC met on November 4, 2015 and examined the external and domestic economic developments and decided to raise the policy rate.
The central bank, in the statement, further said inflationary pressures continued in September 2015 as headline inflation reached 24.1 percent, from 23.0 percent in the previous month.
According to the central bank, the pressures rose mainly from non-food inflation, which picked up by 1.4 percentage points reflecting continued depreciation of the kwacha and second round effects from increases in food prices.
Food inflation also increased, albeit marginally due to the after effects of the decline in agricultural production for the 2014/15 season