In response to the October monetary policy statement by the Bank of Uganda (BoU), Stanbic Bank has reduced its Prime Lending Rate (PLR) from 18% to 17.5%.
As a result, Stanbic now has the lowest PLR of all commercial banks on the Ugandan market and, in line with BOU regulations which require banks to give a one month’s notice before any upward or downward adjustment of interest rates, Stanbic’s new PLR rate of 17.5% for new and existing loans will be applicable from January, 1 2018.
“We are firm believers in maintaining transparency in our pricing to our clients. For this reason, we have consistently matched the movements of the CBR each time the Central Bank has made an adjustment. Stanbic Bank has now reduced its PLR eight times since the easing of the monetary policy was started 18 months ago,” Sam Mwogeza, the Chief Financial Officer Stanbic Bank, said while announcing the new PLRs.
BOU initiated easing of the monetary policy in a bid to boost economic activity through private sector driven credit after interest rates peaked at a four year high of 28% in Q1 2016, reducing the appetite for risk and borrowing.
The policy has so far yielded mixed results, with inflation coming under control, though demand for credit has remained sluggish prompting BOU to act once again.
At the recent BOU monetary policy statement reading in October, Emmanuel Mutebile, the Governor Bank of Uganda said: “Given that annual core inflation is forecast to remain around the medium term target of 5% and economic activity is slowly gaining momentum, a cautious easing of monetary policy is warranted to boost private sector credit growth and to strengthen economic growth.”