Bank of Cape Verde raises rates to make access to credit more difficult

6 January 2012

Praia, Cape Verde, 6 Jan – The Bank of Cape Verde decided to increase the minimum cash availability rates by two percentage points from 16 percent to 18 percent and the base interest rate by 150 basis points from 4.25 percent to 5.75 percent, the central bank said in a statement issued on its website.

The Cape Verdean central bank explained the measures, which are intended to ensure the stability of the exchange rate and of the financial system, by noting the unfavourable progress of the balance of payments, persistence of serious financial problems on an international level, particularly in the Euro Zone, and the development of the economic situation in Cape Verde itself.

As a result of the base interest rate hike, the permanent liquidity facility rose to 8.75 percent and the permanent absorption facility to 3.25 percent.

The announced measures, which were implemented on 1 Jan, are aimed at reducing the capacity to provide credit, both to companies and to individuals, by retail banks. (macauhub)