Mazhar Muhammad Salih, the Economic Advisor to the Prime Minister, stated that the Central Bank’s decision to lower interest rates to 5.5 percent encourages lending.
“The Central Bank’s process of reducing interest rates to 5.5% represents an expansionary policy, because it is assumed that when this rate is reduced, all banks will do the same, whether on loans or deposits,” Mazhar Muhammad Salih said in an interview that dinaropinions.com followed up with.
He noted that “this decision does not encourage people to put their money in the bank, but it encourages lending” in terms of deposits.
“Banks have a lot of surpluses, and they are encouraged to grant more credit,” he said.
