Interest rate on new loans in MDL continues to decrease, reaching 8 percent

Chisinau, 22 April /MOLDPRES/- The interest rate on new loans in MDL continued to decrease and dropped in March to the historic minimum of 8.17%. The interest rate cut stimulates the demand for bank loans, private people and legal entities contracting in March loans worth 1.9 billion lei, with over 450 million lei more than in January, according to data of the National Bank of Moldova.

BNM notes that the volume of credits in national currency in March 2019 exceeded by 32.4% the level recorded in the same period of the previous year. The most attractive were loans with terms from 2 to 5 years (45.5 percent of total loans).

According to the National Bank, loans granted in national currency were mainly represented by loans to individuals (47.8 percent) and credits to non-financial companies accounted for 45.8 percent (47.5 percent belong to trade).

Private people were granted loans in MDL at an average rate of 7.54 percent, and legal entities at a rate of 8.76 percent. Individuals contracted loans for real estate at an average rate of 6.28 percent. Banking statistics show that in March the population took from banks loans for real estate in the amount of 289.5 million lei, a record amount of bank financing.

The interest on bank loans in MDL followed a downward trend after January 2009, when the rate rose to 23.25 percent per total system, and the loans contracted by individuals reached an even higher level of 24.19 percent. There was a long period of downsizing of bank financing, which was offered in November 2014 at 9.81 percent annually, but as a result of the banking crisis it returned to growth and peaked in recent years of 16.09 per cent in January 2016. Subsequently, due to monetary policy easing by the central bank, there was a steady trend of interest rate cuts.

The weighted average interest rate on new loans in foreign currency during the period was 4.27 percent. Foreign currency loans were mainly demanded by non-financial trading companies (91 percent), with a major share (47 percent) coming from trade.