Luthori

[Ligbruderkrieg]

Bank of Luthori announces reducing interest rates from 5.25% to 3.60% on July 1st.
April 5683

Luthori's central bank announced the dramatic decrease of interest rates from 5.25% to 3.60%, effective on July 1st, 5683. This announcement was made by the Governor of the Bank of Luthori, Wilfried Vaugeois. This statement from Luthori's first financial institution came after a meeting of the Supreme Economic Council. Following the meeting, the Bank of Luthori has decreased its interest rates from the rate set on January 1st, 5680 by the same Supreme Economic Council to a new rate of 3,60%. This decrease of 1.65% was justified by "changing economic realities and forecast" by the Bank of Luthori, allowing her to decrease interest rates in order to stimulate the Luthorian economy.

It is widely suspected that the move from the Bank of Luthori was encouraged by Prime Minister Parker-Stanford and his government. The current government is aiming at liberalising elements of the economy and leaving the private sector with a greater role in economic and financial management compared to the state. But, most importantly, the government is focused on encouraging economic stimulus and economic growth through measures that encourage investment, borrowing and financial exchanges. 

The governor stated that the decrease in interest rate was also encouraged by "positive forecast" on economic health for the next years, and that the Bank would like to "encourage the potential growth" of the Luthorian economy by enacting measures meant at favorising exchanges of financial products between corporations or individuals. According to the Treasury Office, the cuts will encourage employment, encourage spending and boost domestic investment, all these measures fostering economic growth for the years to come.

The Fort William Stock Exchange reacted postively to the news, with the Stanford 300 index (listing 300 leading Luthorian corporations) jumping by 3.7% in one day, an example of the financial world's positive reaction to these cuts. Forecasts are stating that the real estate sector might be the largest winner by far of these cuts, as the measure will likely encourage further borrowing and real-estate purchase. Large financial corporations have also reported an increase in the value of their respective stocks, although this trend is closely monitored.

Through this measure, we are reflecting the new condition of the Luthorian economy, we are hoping that these changes will encourage economic growth, stimulated by an increase in economic activities such as borrowing, we are also hoping to kickstart the growth of some targeted industries that will beneficiate from these measures. Finally, our last objective is to encourage long-term direct foreign investment into our economy.

These were the words of BoL's governor, Mr. Vaugeois, when asked about the aims of the Bank of Luthori, and by extension of the Luthorian government by decreasing the interest rates. Economists warn that lower interest rates will have a negative repercussion on the Luthorian Pound (£), with concording reports stating the value of the pound compared to other currencies will be deperciated due to the lower returns in investment caused by the decrease in interest rates.