BoB interest rate hikes: Who gains and who loses?

Tough times: Interest rate hikes make loan repayments costlier PIC: PHATSIMO KAPENG
Tough times: Interest rate hikes make loan repayments costlier PIC: PHATSIMO KAPENG

After raising the interest rate for the first time in 14 years on 28 April 2022, the Bank of Botswana (BoB), raised the interest rate again for the second time this year on 16 June.

In April, the BoB increased the newly introduced Monetary Policy Rate (MoPR) by 51 basis points (0.51%) from 1.14% to 1.65%.

The latest increase is 50 basis points (0.5%) and takes the MoPR to 2.15%. The MoPR is the rate at which BoB lends money to commercial banks. It affects the prime lending rate which is the rate at which commercial banks charge consumers for borrowing money. The prime lending rate is higher than the MoPR to enable banks to cover their basic profit margin.

Editor's Comment
A step in the right direction

That is indeed a welcome development, especially looking at the fact that the manual way of doing things is slowly disappearing and competency in the use of computers and other digital gadgets has become a must.The simple way of looking at it is just an example that almost all companies have gone completely digital and school leavers will be better placed after leaving school, because they will already be familiar with the use of computers.The...

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