Bridgetown.
The Central Bank of Barbados will no longer set the minimum rate that commercial bank must pay on deposits of its clients from April 18.
The minimum interest rate was also used by the Central Bank as an instrument to influence the lending rates of the five commercial banks.
Several banks, had called on the Central Bank to release its control on the savings rate and allow the bankers guided by competition in the market to set their own rate.
Many of them complained the rate set by the Central Bank was too high given the falling demand for loans. Interest rates on savings have dropped from 4.5 per cent in 2008 to 2.5 per cent today.
Governor of the Central Bank, Dr DeLisle Worrell said it would only fix the minimum interest saving accounts of individuals and non profit organization at 2.5 percent.
This means that the majority of the $6 billion held in banks accounts by businesses and other commercial entities would have to accept what each bank assigned to accounts.
