Decline in interest rates good news

Editor,This is an interesting analysis. However, economically speaking, the central bank does not control the behaviour of commercial banks. In fact, the contrary is true; they can lend any ti

Editor,

This is an interesting analysis. However, economically speaking, the central bank does not control the behaviour of commercial banks. In fact, the contrary is true; they can lend any time, and with no liquidity.  They can create money out of thin air.

So, the lowering of interest rates and increment of lending trends can only be explained by the raising confidence of commercial banks in the Rwandan market as gaining some dynamism. This is great news indeed for the private sector.

Gatete, Mozambique

Reaction to the story, “Interest rates set to fall as banks amass cash”, (Sunday Times, August 18)

 

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