The benchmark reference rate fell to 10.06% in April from 11.71% in March, indicating potential relief in borrowing costs and better credit conditions for businesses and households.
The reference rate, which serves as the baseline for loan pricing by commercial banks, aims to enhance transparency and promote consistency in the determination of lending rates. The latest adjustment points to a decline in the underlying variables used in the rate-setting formula, including inflation, the monetary policy rate and treasury bill yields.
A lower reference rate is generally expected to support more favourable borrowing conditions for businesses and households. However, actual lending rates will continue to depend on each bank’s risk assessment, cost structure and borrower profile. Some banks are lending around 17% and latest drop could lead to further reduction in lending rates.
The April rate comes at a time when policymakers and market participants remain focused on improving access to credit, supporting private sector growth and sustaining macroeconomic stability. The drop could provide some relief to firms, particularly small and medium-sized enterprises, that continue to face high financing costs.
The latest decline is likely to shape the decisions of businesses, investors, and financial institutions as they assess implications for lending behaviour, investment activity, and economic confidence.
