Interest rates on new dinar loans down about 4 pp in 2015

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The downward trend was set in train in September 2013 after the NBS initiated the monetary easing cycle.

From September 2013 to November 2015, the weighted average rate on new dinar loans fell by 11.0 pp, from 17.7% to 6.7%, for the corporate sector and by 7.5 pp, from 20.0% to 12.5%, for the household sector.

In the same period, the NBS cut its key policy rate by 6.5 pp, from 11.0% to 4.5%, the NBS reports.

- The sharpest fall in interest rates was recorded in 2015, as a result of faster monetary policy easing. As at November, the weighted average rate on new dinar loans fell by 4.2 pp (from 10.9% to 6.7%) for the corporate sector and by 4.4 pp (from 16.9% to 12.5%) for the household sector - the release reads.

The lower cost of corporate and household dinar borrowing was due primarily to monetary policy easing. In the course of 2015, the NBS trimmed the key policy rate seven times – from 8% to 4.5%, which prompted a fall in interest rates and was conductive to the recovery of credit and economic activity, the NBS reminds.