Interest rates on loans fall as much as 220 basis points
A basis point is the 100th part of a percentage point, and it is used to measure, outside of all ambiguity, the variations in the types of interest.
In the case of loans granted with due dates at 91 to 180 days, which is where the reduction of 220 basis points is found, the average monthly interest rate has fallen from 13.24% to 10.54%.
For the weighted average lending rate, the reduction is 100 basis points, going from 15.49% to 14.51%. This rate is the average of all the rates that are paid for the loans (lending rates), and correspond to all the terms.
The reduction of the types of interest for financing benefits the clients of the banks that have contracted loans, or that are thinking about taking out a loan. By lowering these interest rates, they can take on debt at a lower interest rate; and if they already have loans with the bank, they can request their banking official for a revision of this type of interest, when the terms of the contract the financing permit such a thing.
Since last 31 March, and during two consecutive months, the Central Bank has reduced its monetary policy rate (TPM), and the rates of monetary contraction and expansion, which induces the financial entities to also lower rates for their loan operations and for their depositors.
From the 6.25%, which since August 2013 the Central Bank maintained as its TPM, last 31 May this was lowered to 5%.
In the meantime the acceptance rate was lowered from 4.75% to 3.50%; and that of the expansion was reduced from 7.75% to 6.5%. These reductions lessen the cost of money as they are transferred to the customers of banking services, such as households and companies.
For mortgage loans, the average rate of the month of May went down 70 basis points, falling from 12.39% to 11.70%.
For commercial loans at the same time, the reduction was for 130 basis points, with the average in May add 13.18%.
The reports by the Central Bank also revealed significant reductions in the passive interest rates, which of those that are paid for deposits.
For example, the weighted average fell in 130 basis points, with 60 to 90 day financial certificates being where the greatest reduction occurred: 180 basis points.
Valdez: “I have explained that to you 250 times”
At the press conference held on 19 May, this reporter asked Hector Valdez Albizu, regarding the impact expected and observed as of that date in the interest rates from the affect of the reduction of 100 basis points in the monetary policy rate. The Governor of the Central Bank responded: “I told you, look here. The active rate went from 15.75 to 14.73. And the passive rates went from 7 to 5.75.”
He was asked once again if the reduction seemed proportional to the measure ordered by the Central Bank, and with an impatient and angry tone, he answered this reporter: “I have explained to you like 250 times to you! To you!, And seminars, in the courses, the diplomas, that the measures taken by the monetary policy have a delay of two, three and four months. This is not an immediate reaction. What we have seen here is a variation of 102 basic points in the active rate and 136 in the passive. This is what happened simply, that there is a phase difference. When you plan that the policy rate, should go down 100 points, 50 points, you have to wait…. How long before it takes effect?”
Juan Andujar, the director of the Department of Monetary Programming and Economic Studies of the Central Bank answered him: “The mechanism of transmission is going well, Governor, there are 133 points, and we are 45 days out. Which is to say, in one month and are 15 days the transfer has been more than complete.”
Then, Valdez Albizu pointed out: “Normally when they initiate measures it might take as long as three months. And Andujar confirmed this: “The whole process takes between one and four months.”
Category: DR News |