Mar 2006 Financial News

Commercial Lending Rate Goes Up

Mar 07, 2006

Just a couple weeks after the Central Bank announced an increase in the Repo Rate from 6.25 per cent to 6.50 percent, banks have raised their commercial lending rate to 10.25 per cent.

The increase in the commercial lending rate is a direct result of the increase in the Repo rate as a higher Repo rate makes it more expensive for banks to borrow money thereby driving up the commercial lending rate. The Repo rate was raised in an attempt to subdue inflation.

Sreshtha Tewari
WISE Research Team