Interbank lending rate among commercial banks continues to decline; Does this signal market growth?
Fri, Dec 9, 2016 3:18 PM on Latest, Featured, Stock Market,
Interbank lending rate among commercial banks has continued to decline this week as well. The lending rate was 2% last Friday. It increased slightly to 2.02% this Sunday, but has decreased every day since then. Yesterday (Dec 8), the lending rate was just 1.04%.
On the other hand, lending rate among development banks has not decreased significantly. It increased from 5.17% on December 2 to 5.47% on December 6. The lending rate was 5.13% yesterday.
Interbank Lending rate has been on a downward trend for more than two weeks in a row since banks and financial institutions are now generating further liquidity. This may be a signal that banks will not need to provide higher interest rate to general public on deposits. If this happens, investors can expect the stock market to grow.
However, there is still a big question: is this decline permanent? Or will banks face further liquidity crunch?
On the other hand, lending rate among development banks has not decreased significantly. It increased from 5.17% on December 2 to 5.47% on December 6. The lending rate was 5.13% yesterday.
Interbank Lending rate has been on a downward trend for more than two weeks in a row since banks and financial institutions are now generating further liquidity. This may be a signal that banks will not need to provide higher interest rate to general public on deposits. If this happens, investors can expect the stock market to grow.
However, there is still a big question: is this decline permanent? Or will banks face further liquidity crunch?
