New reductions in rates on new mortgages to families for the entire euro area, while in February there was also a slight reduction in interest on new loans disbursed to businesses. This is reported by the monthly survey prepared by the European Central Bank, relating to the entire currency union.
In February the composite cost of new loans granted to businesses stood at 5.12%, 6 basis points less than the previous month, reflecting a softening of rates. On new loans to families for the purchase of homes, the average cost was 3.84%, reports the ECB, 4 basis points less than the previous month, also reflecting rates.
These dynamics reflect the fact that on the one hand the ECB has stopped its upward maneuver on official interest rates for months, on the other it has launched repeated signals of openness to a first possible cut in June.
The composite indicator of interest on new fixed-term deposits of businesses with banks showed a reduction of 5 basis points, to 3.63%. On the other hand, sight deposits remained stable at 0.90%.
For families, the rates on fixed-term deposits remained 3.17%, while in the case of sight deposits they remained unchanged at a level even lower than that of businesses: 0.38%, according to ECB data.
The rates on banks’ sight deposits are the only item that in the past months has not shown increases in line with those of the official rates decided by the ECB. The topic had also been the subject of controversial remarks by finance ministers at Eurogroup level, however as the months passed they seem to have dropped the topic.
As regards the ECB, the minutes of the March Governing Council, published yesterday, reiterated the openness to possible downward decisions on official rates in June, when much more information will be available to evaluate the situation. They instead indicated that a move in this sense would be more “difficult” at the Council meeting which will take place next Thursday, 11 April. (image source: ECB).
