Metro Rate Cards

Postbank lowers prime lending rate

Managing director of Lesotho Postbank Molefi Leqhaooe

June 3, 2020 2 min read

2 min read

MASERU - Lesotho Post Bank has lowered its prime lending rate from 8.75 percent to 8.25 percent effective from May 27.

The decision comes shortly after the Central Bank of Lesotho (CBL) reduced the CBL rate from 4.25 percent to 3.75 percent per annum.

The CBL stated last week when presenting the Monetary Policy Committee statement that the rate set at this level will ensure that the domestic cost of borrowing and lending will be aligned with the cost funds elsewhere in the region.

Lesotho Post Bank explained in an interview with Metro on Wednesday that the lower prime lending rate simply means customers will enjoy the benefits and afford credit which they could otherwise not.  

On the side of the bank it means that the return that the bank makes on loans will be lower than what it used to get.

“Lower prime lending rate is good news for the customers and I can safely say the bank is happy because we are here to serve customers. On the side of the bank it means the return on loans will be lower than what we are used to getting under normal circumstances,” Lesotho Post Bank head of Wholesale Banking Nare Matsoha said.  

He showed that such a decision normally comes to effect in times of crises such as the current Covid-19 pandemic that has devastated the entire world economies.

Enjoy our daily newsletter from today

Access exclusive features and newsletters, along with previews of new media releases.

Metro News Digital

Get Your Online Newspaper

“The prime lending rate is aligned to the CBL interest rate. So the CBL’s approach going forward will determine as to whether the bank lowers the prime lending rate again or not. This is because the CBL is always trying to maintain price stability as well as the economic activity in the country,” he added.  

The CBL also lowered the NIR target floor from US$660 million to US$530 million. The NIR target remains consistent with the maintenance of the exchange rate peg between the loti and the South African rand.

Share this story


Loading Question

Related Stories