CBM to grant 3.5% interest rate to banks with over K10 bln of Average Excess Reserve

The Central Bank of Myanmar released a statement regarding the interest rate for the Average Excess Reserve of Banks Deposits at the Central Bank (CAB) on 7 October.
The CBM has already instructed to set 2.5 per cent of CAB and 0.5 per cent of Cash at the Bank out of three per cent of the Minimum Required Reserves (MRR) ratio.
In order to estimate the financial status of the business and carry out the Interest Rate Liberalization, the CBM launches the interest rate system based on the Average Excess Reserve of CAB initializing the Interest Rate Corridor and luring the bank interest rate for CAB.
The banks with over K10 billion of Average Excess Reserve will get the interest and it will allow up to K50 billion.
Initially, the interest rate for Average Excess Reserve will be granted at 3.5 per cent of (O/N) for banks starting between 12 October- 8 November.
The CBM will carry out changes (increase/decrease) in interest rate for the MRR and Average Excess Reserve to meet the market demand.
The interest rate will be calculated based on the average excess reserve of the final day of MRR and put in the bank account of CBM with the T+2 system.
Granting interest for average excess reserve will be conducted at the state-owned banks, private banks and foreign banks allowed for Retail Banking at Myanmar Kyats at the same time. — TWA/GNLM