The Central Bank of Myanmar (CBM) announced on 12th March that interest rates will be reduced by 0.5%, effective on April 1. The minimum bank deposit rate will be lowered to 7.5% from 8%, the maximum lending rate for collateralized loans will be to 12.5% from 13% and 15.5% from 16% for non-collateralized loans.
The move comes after the World Health Organization defined the COVID-19 outbreak as a pandemic on March 12, triggering a collapse in global markets.
The CBM re-announced that effective date will be March 16.
U Zaw Oo, an economist from the Centre of Economic and Social Development, warned that a weaker Chinese economy could slow foreign direct investments into Myanmar and delay China's spending on key projects under its Belt and Road Initiative. These include the Muse cross border trade zone, China-Myanmar Economic Corridor, Kyaukphyu Special Economic Zone and New Yangon City.
U Than Lwin senior consultant from Kanbawza Bank, said: “This is the right time to decrease the bank interest rate and drive the economy. The process of easing interest rates is very quick overseas and central banks are quick to respond to the needs of their economies. We need to reduce the bank’s interest rates in order to revitalise businesses in Myanmar."
Source: The Myanmar Times