July 2011 saw uneven developments in the cost of new borrowing by non-financial corporations, both for small loans and for loans of over €1 million. The interest rate on new loans over €1 million with a floating rate or an initial rate fixation period of up to three months increased by 9 basis points from the previous month to stand at 2.87%. The corresponding rate for new loans of the same size with an initial rate fixation period of over ten years decreased by 76 basis points to stand at 3.24% in July 2011. This decrease was caused by both decreases in the interest rates applied in the various euro area countries (the ‘interest rate effect’), -45 basis points, as well as by changes in the relative weights of countries (the ‘weight effect’), -30 basis points. In the case of new loans up to €250,000 with a floating rate and an initial rate fixation period of up to three months, the average rate charged increased by 15 basis points to stand at 4.38%. As regards new deposit agreements, the interest rate on deposits from non-financial corporations with an agreed maturity of up to one year remained unchanged at 1.77% in July 2011 (having stood at 1.78% in June 2011).
Most significant MFI interest rates on new business loans to sole proprietors and unincorporated partnerships:
The interest rate on new loans to sole proprietors and unincorporated partnerships with a floating rate or an initial rate fixation period of up to one year remained basically unchanged at 3.83%, with the interest and weight effect balancing each other out.
Most significant MFI interest rates on new business loans to, and deposits from, households:
In July 2011 the interest rate on new loans to households for consumption with a floating rate and an initial rate fixation period of up to one year fell by 24 basis points to stand at 5.13%. This was driven by changes in the corresponding weights of individual countries; the weight effect was -39 basis points, while the interest rate effect was +15 basis points. The cost of new borrowing by households increased with regard to housing loans in the same period. The interest rate on loans for house purchases with a floating rate and an initial rate fixation period of up to one year increased by 7 basis points to stand at 3.33% in July 2011. Moreover, the interest rate on loans with an initial rate fixation period of over ten years remained basically unchanged
at 4.19% in July 2011.
Rates agreed on new deposits from households showed mixed developments. The interest rate on deposits with an agreed maturity of up to one year rose by 16 basis points to stand at 2.74%. Moreover, the interest rate on deposits redeemable at three months’ notice remained unchanged at 1.70% in July 2011.
