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BoB gives banks free rein on lending rates

Making moves: Pelaelo says the liberalisation of the prime lending rate will be closely monitored
Making moves: Pelaelo says the liberalisation of the prime lending rate will be closely monitored

The Bank of Botswana (BoB) plans to give commercial banks the freedom to set their prime lending rate9s from April 1, the anchor instrument which influences lending rates across other credit products such as scheme and personal loans as well as mortgages.

The central bank argues that freeing up the prime lending rates will “facilitate market competition and fair pricing of credit and other lending products,” although the BoB will monitor implementation and “enforce good business conduct”.

Before a wave of reforms in the country’s interest regime dating back to last April, the prime lending rate, defined as the lending interest rate banks give their best customers, was pegged at one and a half percentage points above the bank rate.

Editor's Comment
Gov't must guard against cadre deployment

As the Botswana National Front (BNF) discusses a policy to place suitably qualified members in strategic positions, the guiding consideration should remain whether an individual is the best person to serve the country. There is nothing wrong with qualified party members applying for public positions. Political affiliation should neither disqualify a capable candidate nor give them an advantage over others. Every Motswana deserves a fair...

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