NBR policy rate cut eases liquidity crunch
CREDIT to the private sector increased significantly last month, thanks to the National Bank of Rwanda’s (NBR) move to cut the reserve requirement ratio that has infused liquidity in the banking system.
François Kanimba, Governor of the NBR, said that in the month of November commercial banks approved Rwf26 billion, the highest performance ever in Rwanda’s credit market.
“The liquidity issue has been addressed and now banks have the financial capacity to resume long-term lending,” Kanimba told Business Times Wednesday during a courtesy visit by the NBR management to the Commercial Bank of Rwanda (BCR).
As one of the ways to ease the lending squeeze to the private sector, early this year the NBR slashed its reserve requirement ratio by three percentage points from 8 percent to 5 percent.
“The cutting of reserve requirement ratio has been fundamental because this was a structural measure which has re-established a new base for bank liquidity,” Kanimba said.
However banks say the impact of this measure by the central bank has only helped to regenerate short-term liquidity.
BCR launches “flexi deposit”
In a bid to support the savings culture in the country, the Commercial Bank of Rwanda (BCR) has launched a new savings account dubbed “Flexi Deposit” that will encourage customers with such accounts to earn impressive interest rates.
The move follows government’s campaign that was launched last month to increase national savings. National savings have been consistently negative, varying in a range between-3 percent and 1 percent of the Gross Domestic Product (GDP).
While the account demands a minimum opening balance of Rwf250, 000, customers are allowed to withdraw up to 50 percent of the deposit amount after period of six months in a year.
Addressing a press conference on Thursday, Sanjeev Anand, the Managing Director of BCR, noted that the launch of the product intends to cement the new face of the bank.
“We have been focusing on sorting out some internal issues and now that all those issues are resolved, we are coming back into the market with a wide range of new products,” Anand asserted.
Festive season sparks off stiff telecom tariff competition.
Telecom companies are busy juggling and revising their tariff regime with equally very persuasive advertising campaigns, targeting mainly the festive season.
All the three telecom operators in Rwanda, MTN Rwanda, Rwandatel and the newly launched Tigo Rwanda, are currently engaged in persuasive advertising of their tariff structures saying they have slashed prices.
MTN Rwanda the biggest in terms of market size has introduced a Christmas promotion dubbed ‘Know Your Tariffs and choose what’s best for you’.
With this package MTN subscribers can call for as low as Rwf0.18 per sec. The other tariffs which are prescribed within the ‘MTN Zone’ facility start with a 25 percent price reduction depending on where a subscriber is calling from, for as much as Rwf1.37 per sec and a 90 percent which goes up to Rwf0.18.
MTN officials said that users would have to subscribe and activate the facility before utilising it.
MTN Zone technology is the latest technology that is provided by Ericsson Company. it is designed to allow callers make big savings in areas where there is low network utilisation.
Officials of Tigo Rwanda, which is a brand of Millicom International Cellular (MIC), said during the commercial launch of the brand, said that the company would not offer any promotional packages.
Government, German bank sign Rwf15.3bn financial instrument
Government has signed a Rwf15.3 billion (EUR 18.5 million) financial agreement with kfw Entwicklungsbank a German development bank that will go into supporting Rwanda’s budget.
The money according to a press statement issued recently will also support public financial management and decentralization.
The signing of the financial agreement happened last week on 10th December.
Stephan Klingebiel, the Director of the kfw offices in Kigali said that “the government of German has committed itself to support Rwanda ownership of development effort.”
Of the total amount of these funds, Rwf11.6 billion will be provided in the form of general budget support for the financial years 2009/2010 and 2010/2010 in supporting of Economic Development Poverty Eradication Strategy (EDPRS).
“The provision of general budget support and financial support to the Common Development Fund (CDF) is seen as an appropriate measure to put the ownership of development effort into action,” explained Klingebiel.
The Rwandan government has prioritized a strong and well functioning public financial management (PFM) system and as a result, PFM has received Rwf828.8 million to reform the PFM agenda.