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Bank deposit rates hit skyrocketed, while government borrowing cost spiked (T-Bill rates) as a result of tight monetary policy and high inflation. Inflation started to follow a decline from October onwards. Government tax revisions improved cash flow of the government and the borrowing cost showed a marginal reduction since October with treasury yields easing off.
Credit granted by commercial banks to the private sector fell for the seventh consecutive month due to high lending rates and slower economic growth. With the economic downturn it is expected that any improvement in bank’s net credit to the private sector would take a longer period.