Namibian commercial banks reduce prime lending rates
All commercial banks in Namibia will have lowered their prime lending rates by the end of the week in response to a demand from the country's central bank.Every financial institution in the country apart from Nedbank Namibia has reduced its rate to 10.5 per cent and the one remaining firm will do so on Friday (November 5th), the Namibian reports. The move comes after the central bank called for a narrower interest rate spread, with the Bankers' Association of Namibia and the Bank of Namibia agreeing last month that by the end of October, the difference between the repo and prime interest rates needs to be 375 basis points.
However, this has been met with resistance, as some banks have indicated they may raise service fees to compensate. Ian Leyenaar, President of the association - which was established in 1997 to represent the interests of the nation's commercial banking sector - was quoted by the news agency as saying: "This structural adjustment will negatively impact the interest margins of all member banks."