THE BSP Financial Group Ltd (BSP) says there will be an increase to its variable rate lending products from Sept 1, 2022.
Group chief executive officer Robin Fleming said the change in the bank’s lending rates was a result of the change in monetary policy signalled by the Bank of PNG.
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| chief executive officer Robin Fleming |
It increased the kina facility rate (KFR) in July 2022 by 0.25 per cent to 3.25 per cent to counter the high domestic inflation.
“The intent of these monetary policy changes is to slow down economic activity which should lead to a lower rate of inflation and as a consequence ease cost-of-living pressures for Papua New Guineans,” he said.
“This is achieved by a combination of higher interest rates, which can act as a brake for businesses making investment decisions, and also by reducing the level of domestic liquidity which is available by commercial banks for lending.”
He said to assist with the implementation of these monetary policy objectives, BSP would increase its indicator lending rate by 0.25 per cent on its variable rate lending products from Sept 1.
The changes will only apply to the bank’s variable rate lending products. Fixed rate lending products such as the first home-owner loan, standard home loan, property investment loan, personal loan, small business loan and credit enhancement scheme loan will remain unchanged.
“The indicator lending rate would increase from 10.10 per cent to 10.35 per cent while the business asset loan rate would increase from 11.50 per cent to 11.75 per cent – an increase of 0.25 per cent.
BSP would also increase the interest rates on their key savings products as a means of encouraging savings and to reduce the gap between lending and savings products.”
The new deposit rates include:
- PLUS Saver increase in rate by 0.75 per cent across all tiers;
- KIDS Savings increase in rate by 1 per cent across all tiers;
- KUNDU Standard increase in rate by 0.60 per cent across all tiers;
- BUSINESS cheque account with interest increase in rate by 0.20 per cent for balances over K250,000;
- TERM deposit increase in rate by 0.50 per cent for new and rollover TDs.
“The Russian-Ukraine war continues to drive inflation resulting in the increase in prices of goods and services in PNG.
“The consumer price index was at 6.9 per cent for the quarter ending March 2022 which is the highest level since 2010 when it peaked at 7.2 per cent,” Fleming said.
Statement
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