Namibia’s commercial banks have reduced lending rates to 13.75 percent from 14.75 percent, following the central bank’s decision this week to cut its repo lending rate by 100 basis points to 9 percent.
Commercial banks, which follow the rates set by the central bank, early this week said that they had reduced lending and mortgage rates to 13.75 percent in line with the Bank of Namibia’s decision.
Standard Bank Namibia, FNB Bank Namibia and Bank Windhoek announced on Thursday that they had reduced their lending rates.
“Everybody is feeling the pressure of tough economic times and the 1.00 percent cut in the prime rate is a welcome relief to consumers,” Standard Bank said in a statement.
All the commercial banks said that mortgage loans and vehicle finance lending rates had been decreased by 13.75 percent with immediate effect.
The 100 percent basis points slash in the BoN’s benchmark rate is the second such cut, after a 50 basis points cut in December 2008, as the bank tries to provide a stimulus to domestic demand.
The central bank said that credit extension to the private sector had gone down while high interest rates have also slammed brakes on motor vehicle sales.
The bank said that motor vehicle sales declined by 25.9 percent in January, while building plans passed fell by 25.9 percent and buildings completed declined by 65.8 percent.
