DUSHANBE, December 9, Asia-Plus — The National Bank of Tajikistan (NBT) has changed the refinancing rate for the third time this year, the NBT press service reported.
This time, the refinancing rate has been increased by 1%, from 9% to 10%, a source at Tajik central bank said, noting that increase in the refinancing rate is one of instruments of the bank’s monetary policy to curb inflation.
According to the source, the inflation rate has exceeded the anticipated rate of 10 percent and, as of December 1, amounted to 11.1 percent. Last year, an average rate of inflation was 7.1 percent.
The NBT press service said that in February this year, Tajik central bank lowered the refinancing rate from 9 percent to 8.5 percent, but following a process of alignment between domestic prices and inflation the bank in late August increased the refinancing rate to 9 percent again.
Refinancing refers to applying for a secured loan
intended to replace an existing loan secured by the same assets. Refinancing may be undertaken to reduce interest
costs (by refinancing at a lower rate), to pay off other debts, to reduce one”s periodic payment obligations (sometimes by taking a longer-term loan), to reduce risk (such as by refinancing from a variable-rate to a fixed-rate loan), and/or to liquidate some or all of the equity that has accumulated in real property during the tenure of ownership.
