Commentary on MFI interest rates

August 2023

Interest rates on new business

Interest rates on new deposits of households recorded the largest change for deposits with agreed maturity in August. As regards non-financial corporations, this type of deposits also saw the largest change.

The interest rate on household deposits with agreed maturity declined by 0.05 percentage point to 6.04%. The interest rate on overnight deposits increased slightly to 1.57%. The interest rate on current account deposits edged up to 0.25%. The interest rate on deposits redeemable at notice increased to 2.70% (this rate is the only one to include, in addition to the household sector, also similar deposits of non-financial corporations, whose volumes are negligible in this category).

The rate on deposits of non-financial corporations with agreed maturity fell by 0.14 percentage point to 6.55%. The interest rate on overnight deposits rose to 1.99%. The interest rate on current account deposits rose to 1.17%. Deposits with agreed maturity of up to one year (which as a rule account for 100% of all deposits with agreed maturity in this sector) were remunerated at a lower rate (6.55%).

Chart 1 – Interest rates of commercial banks on CZK deposits held by Czech residents – new business
Interest rates of commercial banks on CZK deposits held by Czech residents – new business

Within interest rates on new loans to households, the biggest change was recorded for overdrafts and revolving loans in August. Interest rates on loans to non-financial corporations recorded the largest change for loans of over CZK 30 million.

The overall interest rate on consumer credit, loans for house purchase and other loans decreased to 6.89%. The interest rate on consumer credit was unchanged month on month at 9.62%. The rate on loans for house purchase rose slightly, reaching 5.45%. The interest rate on building society loans increased slightly to 6.75%. The interest rate on mortgage loans rose to 5.30%, up by 0.75 percentage points on a year earlier. The interest rate on other loans dropped to 6.56%. The interest rate on overdrafts and revolving loans was up by 0.18 percentage point, to 15.52%. Within this category, the interest rate on overdrafts rose to 17.55%. The interest rate on credit cards picked up to 16.43%.

Interest rates on new loans to non-financial corporations (excluding overdrafts, revolving loans and credit cards) increased to 8.51%. The rate on loans of up to CZK 7.5 million rose to 8.28%. The rate on loans of over CZK 7.5 million and up to CZK 30 million rose to 8.08% and the rate on new loans of over CZK 30 million increased by 0.09 percentage point to 8.61%. The interest rate on overdrafts, revolving loans and credit card loans went up slightly to 9.01%. The interest rate on overdrafts rose to 9.26%.

Chart 2 – Interest rates of commercial banks on CZK loans provided to Czech residents – new business
Interest rates of commercial banks on CZK loans provided to Czech residents – new business

Interest rates on outstanding amounts

The average interest rates on outstanding amounts of deposits of households changed by just a few basis points in August. More pronounced changes were recorded for non-financial corporations.

The average changes in interest rates on outstanding amounts of loans to households were just a few basis points in August. Interest rates on outstanding amounts of loans to non-financial corporations changed at a similar pace.

The overall interest rate on loans to households edged up to 3.92%. The interest rate on loans for house purchase also rose, reaching 3.02% (with the rate on outstanding amounts of mortgage loans picking up to 2.88%). The rate on consumer credit picked up to 8.65% and the rate on other loans increased to 4.48%.

The average interest rate on loans to non-financial corporations was flat at 7.41%. The rate on loans with maturity of up to one year was also unchanged at 9.19%. The rate on loans with maturity of over one year and up to five years decreased slightly to 8.60%. The rate on loans with maturity of over five years rose to 6.34 %.

Notes: