National Bank raises benchmark rates to 12%

The board of the bank has today passed a decision to set the benchmark rates at 12% with the interest rate ceiling of 19% and the interest rate floor of 5%, the Bank told APA-Economics.

The interest rate corridor (a combination of two caps, one purchased by a borrower at a set strike and the other sold by the borrower at a higher strike to, in effect, offset part of the premium of the first cap) will enable to further expand the bank’s power to interfere in the value of the currency in order to increase the efficiency of the monetary management. The move will pave the way for magnetization of additional funds to the banking sector to expand the resource stocks. The step is a good instrument to curb inflation in the country.