The high prevailing borrowing rate of some small borrower – say 15 per cent today – is held out as Exhibit A of the central bank’s inconsiderate policies, never mind that the rate charged includes the policy rate of 6.5 per cent plus an additional spread of 8.5 per cent, consisting of a default risk premium, a term premium, an inflation risk premium, and the commercial bank’s compensation for costs, none of which are directly affected by the policy rate.
