Lek loans are tightened, the highest level of interests since 2018

2022-10-31 08:06:40Biznes SHKRUAR NGA REDAKSIA VOX

The increase in interest rates in the financial market is beginning to be reflected in the price of new loans in Lek. Bank of Albania data show that in September, the average interest rate for new loans in Lek reached 7.07%, the highest level since February 2018.

Currently, the average interest rate of new loans in ALL has increased by 1.18 percentage points compared to a year ago and by 1.6 percentage points compared to March of this year, when the Bank of Albania started monetary normalization.

The growth has started to take on stable characteristics, especially after the month of July, and the average interest of new loans is increasing already for the third month in a row.

Meanwhile, for existing borrowers who have loans with variable interest, the increase in rates is transmitted automatically, through the benchmark indicator, which in the case of the lek is usually the average yield of treasury bonds. From March onwards, yields have been rising at a rapid pace.

The most used benchmark instrument, 12-month bonds, in October were issued with a weighted average yield of 5.26%, increasing by 3.56 percentage points compared to the same period a year ago.

The increase in loan interest rates is expected to gradually bring about a slowdown in lending. This means less injection of money into the economy, slowing down consumption, investment and domestic demand and easing inflationary pressures, which essentially represents the goal of monetary policy in this situation.

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