Monetary Policy
Transcript of May 2015 MPC Press Release
Thursday, 21 May 2015 00:00

 The exchange rate depreciation is one of the factors that the Committee considered before moving up on the policy rate because we found out we need further tightening to rein-in aggregate demand and therefore reduce the pressure on the foreign exchange market. That is a major way in which the central bank affects that. We do not have any regulation now as to how much banks can charge for their lending rates and so on. Those are based on the banks’ own determination of the risks, profitability and so on. What we have is what we call the base rate that have some elements in it and then the differences between banks will depend upon how much profit they think they have to make to be able to at least, cover their costs and so on. I agree that there have been a lot of complaints about how much the banks charge especially in the light of the profits they are making and so on. Some of these things we do through moral suasion.

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