Despite the peso appreciating 25 points to the US dollar since last August, interest rates on loans and savings institutions loans have not been reduced accordingly.
The Listin Diario reports that while banks have reduced by around 8% the yield paid to their depositors, the same banks have not adjusted the rate they are charging for loans. Those who borrowed at interest rates of under 22% prior to 2002, say they continue to pay the 26-32% on property mortgage loans that went into effect as the peso depreciated to 40-50%. Manuel Ruiz, of the Asociacion Mocana de Ahorros y Prestamos, explained that the loans and savings banks have new costs due to the application of prudential measures by the Central Bank authorities. He explained that the reserves level was increased 15%, which increases bank costs. He said that the new regulations limit them to placing 20% of their deposits in commercial banks and 80% in Central Bank certificates.