Bank Loans Get More Cheaper As Reserve Bank of Malawi Cuts Bank Rate to 13.5 Percent
The Reserve Bank of Malawi (RBM) has resolved to slash the policy rate - the bank rate - a key driver of interest rates on loans to 13.5 percent in the short-term on account of continued decline in inflation and sustained economic gains.
The decisions RBM Governor Dalitso Kabambe announced at a news conference in Blantyre pushed the policy rate from 14.5 percent to 13.5 percent. In his announcement, Kabambe said the central bank's Monetary Policy Committee (MPC) made the decision after a Macro-economic Conditions Review Meeting.
Kabambe said the committee's assessment is that the projected improvement in macroeconomic outlook for 2019 remains firm,with inflation projected on a downward trend.
"Notably,there has been significant decline in non-food inflation,a trend which is expected to be sustained in the medium term,"said Kabambe. He said the MPC therefore resolved to reduce the policy rate by 1.0 percentage points from 14.5 percent to 13.5 percent.
However, Kabambe said the lombard rate has been maintained at 0.5 percent and 3.75 percentage, respectively.
"At this level, the policy stance remains adequately tight to guide inflation towards the medium term objective of 5 percent. Monetary policy decisions will continue to be guided by inflation forecasts and outcomes as well as progress in fiscal consolidation measures," he said. Read More from All Africa.
Source: All Africa