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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%.