South Africa Central Bank Chief Favors Ending Use of Prime Rate

South African Reserve Bank Governor Lesetja Kganyago said he favors ending the use of prime, the main reference rate commercial banks use to price trillions of rand of loans to clients.

“We would like to have much more transparency, so that consumers know what is actually going on,” Kganyago said in an interview Wednesday on NewzRoom Afrika from the World Economic Forum in Davos, Switzerland. The central bank is undertaking a study to review the rate, and “the most natural outcome would be that we just get rid of prime,” he said.