The gradual decline in interest rates on loans and deposits continues, yet the rates still remain significantly above official inflation levels.
Deposit Interest Rates Also on a Downward Trend
Short-term deposit rates are sliding. For deposits with up to 1-month maturity, the average interest rate was 50.57% last week—down from over 56% in mid-May and 53% in mid-July. Back in mid-March, before the recent rate moves, it stood at 47.98%.
For deposits with 1 to 3-month maturity, the average rate fell to 51.55% last week, compared to over 59% in mid-May and 56% in mid-July. In mid-March, this rate was around 49.91%.
Deposit rates with 3 to 6-month maturity had dropped to as low as 38% two weeks ago, after peaking above 47% in June. However, last week saw a slight rebound to 41.06%.
For longer terms, the average rate last week was 44.79% for deposits with 6 to 12-month maturity, and 32.70% for those exceeding one year. Across all maturities, the average stood at 50.50%.
It’s important to note that these averages mostly reflect rates offered on high-volume deposits. Many individual savers may encounter lower rates at their banks.
Looking Ahead: What to Expect from Interest Rates
After bringing the policy rate down to 43% in July, the Central Bank is expected to continue its rate-cutting cycle in the September meeting.
Despite the ongoing cuts, the CBRT is anticipated to maintain a tight monetary stance by keeping real interest rates high. In this scenario, loan interest rates are likely to stay well above the inflation rate, preserving the real yield for lenders.
