Legislators voice concerns over high interest rates in commercial banks


Legislators voice concerns over high interest rates in commercial banks

Yanditswe November, 22 2019 at 09:27 AM

The Central Bank has reported profits of up to 13.6 Billion Frw during the 2018/2019, up from 4.6 Billion during the previous Fiscal year.

Bank Officials made the announcement while appearing before of chambers of Parliament.

The Team from the Central Bank explained to the Parliamentarians that despite a volatile 2018/2019 Fiscal Year Globally, the bank did succeed in keeping things stable here in Rwanda.

John Rwangombwa, Central Bank Governor said; "As the Central Bank, we do all this with the objective being a stable economy and as I said, that is determined basing on inflation levels. And I did say that during that particular fiscal year, it remained very low, an average of between just 0 and 8% the entire year. We do not want it falling below 2% usually and if we could we would keep it at closer to 5%, not more, not less."

The Parliamentarians, however, voiced concerns over high loan interest rates among Commercial Banks, saying it hinders economic development. 

In response to that concerns, Rwangombwa explained; "Because we have been reducing the Central Bank's repo rate, falling from close to 6.5% in 2017 to the current rate of 5%, they too; the commercial banks, have been reducing their interest rates, maybe not as quickly as people may wish, but as we look at those graphs: close to 17.3% in 2017; then 16.78% last year and now presently at 16.4%on average we do see a reduction in the interest rates commercial banks ask for."   

The Central Bank Officials also told the Parliamentarians that technology has helped payments for services increase from 30% in June 2018; to 34.6% in June this year.

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