The changes in the lending rates are in line with the Central Bank increase of the Kina Facility Rate (KFR) from 3.00% to 3.25% due to the rising pricing of domestic goods and services owing to imported inflation.
Kina will apply a 0.25% increase in the Indicator Lending Rate (ILR) to reflect current market conditions. Mr. Pawson said, “As the country comes out of a very challenging COVID and ongoing global supply crisis, fears of a global recession have taken centre stage in decision making.”
Initial forecasts for PNG’s inflation in 2022 was 5.00%, however first quarter inflation was higher-than-expected at 6.90% as per the Consumer Price Index (CPI) in March. Much of this inflationary pressure is imported, given the rising fuel prices and volatile commodity prices amidst a complex and unpredictable geopolitical environment.
“Kina Bank’s ILR aims to provide our business customers with a transparent and competitive approach to pricing our loan book. We have worked to ensure the lending landscape remains productive. The increase from 6.25% to 6.50% reflects an increase in our cost of funds due to the inflationary environment”, said Mr Pawson.
The ILR impacts business loans and overdraft facilities. Kina will make no changes to other loan products such as personal loans, home loans and SME loans.
We continue to maintain the most competitive deposit product pricing and product offerings amongst commercial banks. An example if this is our recently launched Tomorrow Savings product paying a market leading rate of 4% as an incentive to promote retail savings.
All affected customers will be contacted by their respective branches or Lending Relationship Managers. If Kina Bank customers may reach call our Customer Contact Centre on +675 308 3800 or 180 1525 or send us an email at kina@kinabank.com.pg