Malawi’s vice president called on the country’s central bank to consider forcing lenders to lower interest rates and help drive economic growth.
The gap between deposit rates offered to customers and the rate charged for borrowing of more than 23% is too wide and must be addressed “as a matter of urgency,” and the Reserve Bank should issue a directive to reduce it if persuasion doesn’t work, Saulos Chilima said at a conference on Thursday.
“As the financial sector opened up, one would have expected competition to force the narrowing of the spread,” he said. “That is not the case.”
The central bank kept its benchmark rate at 12% last week as it seeks to contain inflation that’s expected to average 9.1% this year, while still supporting economic growth seen accelerating to 3.8%.
