Almost a month after Reserve Bank of Malawi reviewed the policy rate through the Monetary Policy Committee (MPC), RBM’s financial market reports have shown that the central bank’s review of the Liquidity Reserve Requirement (LRR) has had positive impacts on commercial banks.

LRR is defined as the ratio of deposits that commercial banks keep with RBM without interest. LRR was lowered was lowered to 3.75% from 7.5%.

It has been noted in RBM’s reports that since the lowered LRR rate, interbank borrowing decreased from 5.76% to to 5.03%.