Bank loans get more cheaper as Reserve Bank of Malawi cuts bank rate to 13.5%
The Reserve Bank of Malawi (RBM) has resolved to slash the policy rate—also known as the bank rate—aa 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 suistained 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.
The governor also said with forecast in maize production, the country is likely to get the lowest inflation rate ever since 1990 this year, with growth projected at five percent, up from 4.2 percent in 2018.
The governor also said with forecast in maize production, the country is likely to get the lowest inflation rate ever since 1990 this year, with growth projected at five percent, up from 4.2 percent in 2018.
This growth is higher than the 3.5 percent global growth and 3.7 percent sub-Sahara African growth.
Kabambe said : “As inflation rate continues to go down, our objective is to ensure that inflation rate goes down to five percent, our policy rate would be at 11 percent. Looking at these macro-economic indicators, we all agree that our economy has indeed recovered.
“Recovery of economy is one side of the story, what sets in from there is what the private sector needs to grow the economy by expanding their economic activities so that the stability in the economy would be meaningful to Malawians,” he said.
The Monetary Policy Committee (MPC) last reduced the policy rate in January by 1.5 percentage points from 16 percent to 14.5 percent.
This was 13 months since MPC last trimmed the policy rate, which was revised downwards in November 2017.
This must have been good news to borrowers who have been struggling to settle their loans with commercial banks.
Clear proof how intoxicating nepotism can be. Dr Kabambe throwing his professionalism to the dog just to please his political kinsman master. He should rather go to MBC, MACRA, MERA, ACB, ADMARC,etc. Kabambe should not destroy the good reputation RBM has of being above PETTY party politics. He should stop bringing in fake politicoeconomics at RBM. The RBM vehemently refused to issue a fake forex license even under intense political pressure from Goodall Gondwe. This is on RECORD, rather Goodall was forced to forge it alone through the ministry of finance. That is called integrity. Osabweretsa za chilendo ku RBM… Read more »
we no longer trust Government… i take it as a trap…
It is very difficult to access those loans even with a solid business. Some of us have had experiences with these banks. I will not dare anymore getting a loan from the mafia Malawi banks.
I had an opportunity to listen to one economist who confided on these doctored figures. Let’s wait and see what happens these development after the elections.
Please do not loan from MALAWIAN BANKS try else where! Please Malawian,I beg you let polticians and bank staff loan these monies.
I hope you wanted to say ” Do not borrow from Malawian Banks”
Kabambe just keep quiet, Tell us after election.You want to put us in adebt trap as in 2013.Bingu 20% after death it came to 51%.People still remember those wounds and Goodall Gondwe can not react ta act!! yet people suffered and more are still suffering!
We need to see banks losing to customers too.Business is all about risks. ALL SECURITIES CITIZENS give to, are not selling to you.If a loaner gets loan and does not repay even single, that one his intention was to sell.People fear your loans because of what happens in 2013.20% interest jumped to 51%.no controls,pity to citizens of the poorest country of the world.,the most robbed country by politians,
Standard bank have you read this? Gangster bank. Selling clients property to its staff at giveaway prices and 3% interest.
Agree. Absolute mafia bank. Same as National Bank.
APM’s hard work now bearing sweet fruits. Awinanso.
Now its high time we became independent.Government and Banks should start quashing loans and stopping interest rates when loans are dormant. You think if people fail to repay are doing it deliberately. Its your poor policies that make citizens fail.Government must take responsibilities not snatching citizens properties when it is known that ignore I M!F advances and turn the economy in bad.All these cashgates kubela wanthu.Stupid ZANU.