Commentary on MFI interest rates

October 2023

Interest rates on new business

Interest rates on new deposits of households recorded the largest change for deposits with agreed maturity in October. As regards non-financial corporations, the rates on overnight deposits and deposits with agreed maturity saw the largest changes.

The interest rate on household deposits with agreed maturity declined by 0.08 percentage point to 5.94%. The interest rate on overnight deposits increased slightly to 1.59%. The interest rate on current account deposits increased slightly to 0.27%. The interest rate on deposits redeemable at notice was unchanged from September at 2.76% (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 fell by 0.05 percentage point to 6.45%. The interest rate on overnight deposits increased by 0.05 percentage point to 2.11%. The interest rate on current account deposits rose marginally to 1.24%. 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 (6.45%).

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

Source: ARAD data series system

Within interest rates on new loans to households, other loans and credit card loans recorded the largest change in October. Interest rates on loans to non-financial corporations saw the largest change for loans of up to CZK 7.5 million.

The overall interest rate on consumer credit, loans for house purchase and other loans decreased to 6.70%. The interest rate on consumer credit decreased month on month to 9.37%. The rate on loans for house purchase fell to 5.42%. The interest rate on building society loans decreased to 6.92%. The interest rate on mortgage loans decreased to 5.30%, up by 0.67 percentage points on a year earlier. The rate on other loans rose by 0.16 percentage point to 6.53%. The interest rate on overdrafts and revolving loans rose to 15.60%. Within this category, the interest rate on overdrafts edged up to 17.56%. The interest rate on credit cards stood at 16.30%, down by 0.16 percentage point.

Interest rates on new loans to non-financial corporations (excluding overdrafts, revolving loans and credit cards) decreased to 8.49%. The rate on loans of up to CZK 7.5 million dropped by 0.13 percentage point to 8.17%. The rate on loans of over CZK 7.5 million and up to CZK 30 million declined slightly to 7.97% and the rate on new loans of over CZK 30 million edged up to 8.66%. The interest rate on overdrafts, revolving loans and credit card loans was up to 8.95%. The interest rate on overdrafts rose to 9.25%.

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

Source: ARAD data series system

Interest rates on outstanding amounts

The average interest rates on outstanding amounts of deposits of households changed by just a few basis points in October. Similar 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 October. 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 4.01%. The interest rate on loans for house purchase also rose, reaching 3.11% (with the rate on outstanding amounts of mortgage loans picking up to 2.96%). The rate on consumer credit increased to 8.69% and the rate on other loans increased to 4.56%.

The average interest rate on loans to non-financial corporations was unchanged from September at 7.42%. The rate on loans with maturity of up to one year fell to 9.10%. The rate on loans with maturity of over one year and up to five years rose marginally to 8.61%. The rate on loans with maturity of over five years increased, reaching 6.35%.

Notes: