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Bhutan central bank introduces new rate policy

The RoyalMonetary Authority of Bhutan is introducing a new integrated ratepolicy called the minimum lending rate.

The minimum lending rate is a single benchmark rate for lendingthat will be applied to all financial institutions. Each financial institutionwill add its expected spread to determine their final lending rates.

The new lending rate is meant to encourage competition andprofessionalism among financial institutions.

The new policy will be effective Aug. 1.