By Kofi AHOVI
Commercial banks’ interest spread, which is the difference between the average of the lending rates and the average deposit rates, insisted on by the banks, has narrowed significantly by 87 basis points.
The average base and lending rates of the Deposit Money Banks (DMBs) declined between August and October, this year, as the average base rates, quoted by the banks, declined by 93 basis points to 26.2%, while the average lending rates declined by 87 basis points to 27.6% over the same period.
The average deposit rates of the commercial banks were unchanged at 9.5% between August and October, this year.
The share of short-dated government securities went down to 36.6% in October 2010 from 38.8% in August 2010. A strong non-resident investor demand has continued to contribute to the lengthening of the average maturity.
Interest rates declined over the entire spectrum of the yield curve. Between August and November, the 91-day Treasury bill rate declined from 12.7% to 12.3%. The 182-day Treasury bill rate also declined from 13.1 to 12.7%.
The rate on the 1-year note fell from 13.4% to 12.72%. That for the 2-year fixed rate note also dropped from 13.4% to 12.75 per cent. The 3-year instrument, which was at 14.2% in August, went down to 13.3% in November 2010.
Over the same period, the interbank overnight rate, which is the rate at which the commercial banks borrow from each other, fell from 12.3% to 11.6%.
Commercial banks’ interest spread, which is the difference between the average of the lending rates and the average deposit rates, insisted on by the banks, has narrowed significantly by 87 basis points.
The average base and lending rates of the Deposit Money Banks (DMBs) declined between August and October, this year, as the average base rates, quoted by the banks, declined by 93 basis points to 26.2%, while the average lending rates declined by 87 basis points to 27.6% over the same period.
The average deposit rates of the commercial banks were unchanged at 9.5% between August and October, this year.
The share of short-dated government securities went down to 36.6% in October 2010 from 38.8% in August 2010. A strong non-resident investor demand has continued to contribute to the lengthening of the average maturity.
Interest rates declined over the entire spectrum of the yield curve. Between August and November, the 91-day Treasury bill rate declined from 12.7% to 12.3%. The 182-day Treasury bill rate also declined from 13.1 to 12.7%.
The rate on the 1-year note fell from 13.4% to 12.72%. That for the 2-year fixed rate note also dropped from 13.4% to 12.75 per cent. The 3-year instrument, which was at 14.2% in August, went down to 13.3% in November 2010.
Over the same period, the interbank overnight rate, which is the rate at which the commercial banks borrow from each other, fell from 12.3% to 11.6%.
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