Sep 2004 Financial News

Reduction in Lending Rate

Sep 29, 2004

Republic Bank Ltd will from tomorrow offer a reduced TT dollar prime lending rate of 8.75 per cent, according to a statement from the bank yesterday.

This represents a 0.75 per cent reduction, as the previous rate was 9.50 per cent.

The bank said the adjustment was a direct consequence of the three per cent reduction in the reserve requirement of commercial banks, from 14 per cent to 11 per cent, announced by the Central Bank last week Wednesday.

In announcing the reduction, Republic's managing director Ronald Harford welcomed the move by the Central Bank to reduce its reliance on the reserve requirement and to place greater emphasis on open market operations which, he said, was a more efficient mechanism of monetary control.

According to the statement, Harford said a lower reserve requirement would reduce the spread between the borrowing and lending rates of the commercial banks, which, in turn, would act as a stimulus for domestic economic activity.

The reduction in Republic's lending rate will immediately reduce the borrowing costs of the bank's corporate and commercial customers.

Source: Trinidad Express