Commentary on MFI interest rates

October 2022

Interest rates on new business

Interest rates on new deposits of households recorded the largest change for deposits redeemable at notice in October. As regards non-financial corporations, overnight deposits saw the largest change. 

The interest rate on household deposits with agreed maturity decreased to 6.06%. The interest rate on overnight deposits rose to 1.19%. The interest rate on current account deposits edged up to 0.17%. The interest rate on deposits redeemable at notice increased by 0.17 percentage point to 2.18% (this is the only rate to include, besides the household sector, similar deposits of non-financial corporations, which are negligible in this category).

The rate on deposits of non-financial corporations with agreed maturity rose marginally to 6.46%. The interest rate on overnight deposits increased by 0.12 percentage point to 1.53%. The interest rate on current account deposits also increased, reaching 0.92%. Deposits with agreed maturity of up to one year (which as a rule account for 100% of all deposits with agreed maturity in the case of this sector) were remunerated at a higher rate (6.46%).

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 other loans in October. 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 dropped to 6.81%. The interest rate on consumer credit edged down month on month to 9.69%. The rate on loans for house purchase also fell, reaching 4.86%. The interest rate on building society loans declined slightly to 6.64%. The interest rate on mortgage loans decreased to 4.63%, up by 2.15 percentage points on a year earlier. The rate on other loans fell by 0.48 percentage point to 7.10%. The interest rate on overdrafts and revolving loans rose to 15.09%. Within this category, the interest rate on overdrafts increased to 17.44%. The interest rate on credit cards declined to 16.74%.

Interest rates on new loans to non-financial corporations (excluding overdrafts, revolving loans and credit cards) increased to 9.09%. The rate on loans of up to CZK 7.5 million was down to 8.13%. The rate on loans of over CZK 7.5 million and up to CZK 30 million rose to 7.85% and the rate on new loans of over CZK 30 million increased by 0.73 percentage point to 9.26%. The interest rate on overdrafts, revolving loans and credit card loans edged up to 8.99%. The interest rate on overdrafts increased to 9.30%.

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 tenths of a percentage point in October. Similar changes were also 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 October. Interest rates on outstanding amounts of loans to non-financial corporations recorded similar changes.

The overall interest rate on loans to households edged up to 3.54%. The interest rate on loans for house purchase also rose, reaching 2.65% (with the rate on outstanding amounts of mortgage loans picking up to 2.51%). The rate on consumer credit picked up to 8.41% and the rate on other loans increased to 4.28%.

The average interest rate on loans to non-financial corporations rose somewhat to 7.32%. The rate on loans with maturity of up to one year grew to 9.07%. The rate on loans with maturity of over one year and up to five years rose to 8.41%. The rate on loans with maturity of over five years increased, reaching 6.21%.

Notes: