Finance Bank considers reducing base rate
By NKOLE CHITALAFINANCE Bank Zambia (FBZ) is likely to reduce its Kwacha base rate following the decline in inflation figures.
FBZ corporate affairs director Noel Nkoma said the bank’s board is meeting this week to decide on whether interest rates should be adjusted downwards or not.
“Yes we are going to make an announcement shortly in the next one week or so,” he said.
On Tuesday, Minister of Agriculture and Co-operatives, Peter Daka said commercial banks must reduce interest rates to as low as nine percent to make the cost of borrowing more affordable for peasant and commercial farmers.
Mr Daka said interest rates charged at 28 percent in productive sectors are discouraging.
He said banks should look very critically at the level of interest rates which have continued to remain high despite the reduction in inflation.
The Central Statistical Office announced that inflation had declined to 9.6 percent in January from 9.9 in December.
“This is an area we need to continuously review, especially that we have to make borrowing affordable,” Mr Daka said.
Last year, Standard Chartered Bank was the first bank to reduce its Kwacha base rate from 24 per cent to 21 percent.
Invest Trust Bank also reduced from 24 to 22 percent, while Stanbic Bank recently reduced to 19 per cent.
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