General
Press Releases
Press
Release March
31, 2003Change
in Monetary Policy.
The
Central Bank of Barbados wishes to advise the public of a
modification to its monetary policy.
With
effect from April 14, 2003, the Bank will discontinue the
setting of indicative weighted average rates of interest on
loans from commercial banks.
During
July 2001, the Bank introduced indicative weighted average rates
of interest on loans from commercial banks. The Bank explained
that its intention was to reduce the cost of borrowing and
provide some support to the leading economic sectors. This was meant to be a temporary measure which was to be
reversed in due course so as to be consistent with the Bank’s
commitment to gradual financial liberalisation.
Between
September 2001 and January 2003, lending rates at commercial
banks fell substantially. The weighted average lending rate of interest on all loans
fell from 11.43% to 10.42% and the prime lending rates have
declined from a range of between 9.50% and 10% to a range of
between 6.75% and 8.50%.
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