Rising treasury bill rates push up borrowing cost to 12.43pc

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Business Desk :
The lending rate is on an upward trajectory, with the Six-Month Moving Average Rate of Treasury Bills (SMART), utilised for determining loan interest rates, experiencing a surge to 8.68% in January.

Banks incorporate a 3.75% margin with the SMART or reference rate to determine the lending rate.

Consequently, borrowers now face a peak rate of 12.43% for bank loans.

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In January, the highest interest rate was 11.89% owing to the government’s borrowing through treasury bills and bonds at higher interest rates to curb the mounting inflation.

Calculation of Six Months Moving Average Rate of Treasury Bill (SMART) is the benchmark for determining interest rates.
In December, banks had the highest lending rate for borrowers 11.22%.