Loans interest rates slight down

TIRANA, June 4 – Interest rates for lek-denominated loans registered a slight decrease in April 2012, reflecting the first positive signs of the consecutive key interest cuts the Bank of Albania has made since Sept. 2011. Latest Bank of Albania data show average interest rates for lek loans dropped to 11.1 percent in April 2012, down from 12 percent last March and when the Bank of Albania lowered the key interest rate to 4.25 percent, the lowest historical level.
However, in April 2012, interest rates for loans in lek stood at exactly the same levels compared to Sept. 2011 when the key interest rate was lowered from 5.25 percent to 5 percent.
Interest rates for euro denominated loans, which hold the majority 60 percent of total lending also slightly fell to 7.3 percent in April 2012, down from 7.5 percent in March and 7.2 percent in Sept. 2011.
Meanwhile, interest rates for 12-month lek-denominated deposits also slightly dropped to 5.6 percent in April 2012 down from 5.7 in March 2012 and 5.9 percent in Sept. 2011. Interest rates for Euro deposits stood at 3.3 percent last April unchanged compared to Sept. 2011.
“Interest rates for lek-denominated loans have not fully reacted to facilitating signals, reflecting an increase in premium risks for credit to special branches of the economy,” said central bank governor Ardian Fullani in his latest press conference.
In the latest Bank of Albania auction, 12-month treasury bills slightly dropped to 7.34 percent, down from 7.37 percent while 3-month T-bills were also down by 0.03 percent to 5.28 percent.
Since Sept. 2011, the Bank of Albania has lowered the key interest rate by 1 percentage point to 4.25 percent.