Maravi

BoZ sets benchmark lending rate at 9%

COMMENT - Zambia's central bank setting interest rates at 9% means that this is the lending rate from them to other banks, and that bank to consumer lending rates are going to be higher than that. Lower is better, but it still puts lending rates for consumers above 9%.

BoZ sets benchmark lending rate at 9%
By Gift Chanda
Fri 30 Mar. 2012, 13:00 CAT

THE Bank of Zambia has set the country's inaugural benchmark interest rate at nine per cent in a policy shift intended to broaden financial markets and augment ongoing government efforts to lower lending rates.

On Monday, BoZ announced the introduction of a Policy Rate, named BOZ Policy Rate, effective April 2, 2012 to replace the money supply targeting that has previously been its major policy tool.

The policy rate allows BoZ to clearly signal its monetary policy stance to the market, providing financial market participants with a credible and stable anchor for setting of interest rates on their credit products.

The economic indicators that would guide BoZ Policy Rate adjustments, include, among others, output, expected inflation and the exchange rate.

In adjusting the BoZ Policy Rate, the Bank's overall objective would be to maintain inflation within the average target of seven per cent for 2012.

"The Bank has weighed the inflation risks and has determined that average inflation during the policy-relevant period would remain below seven per cent and the BoZ Policy Rate, consistent with this development, has been set at nine per cent," said BoZ deputy governor Dr Bwalya Ng'andu.

"The Bank will continue monitoring economic and financial developments and may adjust the policy rate if the need arises."

The Policy Rate will be reviewed on a monthly basis.

Labels: BOZ, LENDING RATES

posted by MrK @ 1:06 PM