AWPR rose by 120 basis points in 2011; private sector credit growth robust

Thursday, 12 January 2012 00:44 - - {{hitsCtrl.values.hits}}

The Central Bank said yesterday that the credit obtained by the private sector remained robust through 2011, and by November, recorded a year-on-year growth of 33.5%.

Largely reflecting the robust expansion of credit, broad money growth also remained at a level higher than that projected for 2011.

Year-on-year growth of broad money (M2b) was 20.6% by November. However, market interest rates moved upwards in recent months, in line with changing liquidity conditions in the domestic money market. As a result, the benchmark yield on one year Treasury bills recorded an increase of around 175 basis points in 2011, while the average weighted deposit rate (AWDR) recorded an increase of about 100 basis points. Central Bank also said the average weighted prime lending rate (AWPR) increased by around 120 basis points in 2011, although at the last auction, the weighted average yields on Treasury bills in the primary market remained unchanged, indicating some stabilisation in market conditions. “These moderate upward movements in interest rates are likely to exert a restraining effect on monetary aggregates, which would, in turn, help to curb the build up of demand pressures,” the Central Bank added.