KALONDE NYATI, Lusaka
PRIVATE sector credit, which had slowed down due to the economic headwinds that characterised the country, is projected to rebound, as the economy begins to show signs of recovery, newly appointed Standard Chartered Bank chief executive officer Herman Kasekende says.
In an interview on Thursday, Mr Kasekende said the central bank monetary policy rate has been reducing, which is expected to trickle down on commercial bank interest rates thereby support private sector growth.
The Bank of Zambia (BoZ) has reduced the policy rate by 150 basis points to 14 percent from 15.5 percent and further reduced the Statutory Reserve Ratio by 250 basis points to 15.5 percentÂ from 18 percent, a move that is expected to push down interest rates in the country.
Interest rates in the market have started showing signs of reductionÂ averaging 29.2 percent as at mid-this year from 29.42 percent as at December 2016.However, individual commercial banks are charging as high as 35 percent.
â€œWe recognise our role as transmitters of monetary policy. Standard Chartered Bank has already started reducing all our base rates on all monetary policy-rate linked facilities and we shall ensure that we put the interest rates even lower because we strongly believe that private sector growth is important for economic growth,â€ he said.
Mr Kasekende also said the bank is upbeat about the economy, which has been rebounding.
â€œThe economy is on the right path. The macro-economic dynamics are now stabilising.Inflation is in single digit [at around seven percent], the Kwacha has appreciated from the highs of K14,Â witnessed in the past, toÂ the K9.00 levels and interest rates are also pointing southward, so, we think all those are key ingredients to the growth trajectory,â€ he said.
Mr Kasekende said with the positive trends prevailing, the bank is committed to assisting the private sector to invest through provision of capital.
He also said the bank will also continue to support growth sectors to accelerate economic growth.
Last year alone, the bank gave out over US$ 800 million to growth sectors with mining accounting US$600 million, energy US$150 million and agriculture US$ 90 million.
KALONDE NYATI, Lusaka