Further Malawi interest rates cut likely

BLANTYRE – Malawi could cut interest rates further after a five percentage point drop to 20 per cent in November, paving the way for government bond issues, its finance minister said.

Malawi Finance Minister Goodall Gondwe said relatively high interest rates were delaying the issuance of bonds in the impoverished southern African nation, which said after the 2006/07 budget that it would look to the market to raise funds for infrastructure projects. “We are not there yet.We need to see interest rates go down further …let’s wait and see,” he told Reuters in an interview, adding prospects for a further rate cuts were high.”If we continue to perform at this rate, we should reduce the interest rates further.I don’t think that will be very long from now,” Gondwe said, referring to government spending and policies that have helped curb inflation.The Reserve Bank of Malawi slashed lending rates to 20 per cent from 25 per cent in November, following the decision by the International Monetary Fund (IMF) and World Bank to cancel the bulk of the country’s US$2,9 billion foreign debt.Nampa-Reuters”We are not there yet.We need to see interest rates go down further …let’s wait and see,” he told Reuters in an interview, adding prospects for a further rate cuts were high.”If we continue to perform at this rate, we should reduce the interest rates further.I don’t think that will be very long from now,” Gondwe said, referring to government spending and policies that have helped curb inflation.The Reserve Bank of Malawi slashed lending rates to 20 per cent from 25 per cent in November, following the decision by the International Monetary Fund (IMF) and World Bank to cancel the bulk of the country’s US$2,9 billion foreign debt.Nampa-Reuters