Interest rates for new loans at the nation’s five major state-run banks last month rose 0.014 percentage points to 1.435 percent on average, as lenders raised borrowing costs for mortgages, consumer loans and corporate loans to boost working capital, the central bank said yesterday.
The adjustments came as Bank of Taiwan (臺灣銀行), Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行) on Monday raised their interest rates after the central bank last week increased its discount rate from 1.375 percent to 1.5 percent to tame inflation.
PRE-COVID-19 LEVELS
Photo: Chen Mei-ying, Taipei Times
“Following the latest adjustments, interest rates for almost all banking operations returned to the level prior to the COVID-19 pandemic in March 2020,” when the monetary policymaker cut the discount rate by 0.25 percentage points to a historic low of 1.125 percent to ease the financial burden of borrowers, the central bank said in a statement.
New mortgages last month carried an annual interest rate of 1.601 percent, gaining 0.4 percentage points from April, the central bank said, as some lenders adjusted rates on a quarterly basis.
The rate would climb higher this month after the central bank introduced another rate increase of 0.125 percentage points on Friday last week and could tighten further if inflationary pressures fail to ease off.
Interest rates for corporate loans to boost working capital edged up 0.042 percentage points to 1.387 percent on average last month, while interest rates for consumer loans rose 0.1 percentage points to 2.356 percent on average, the central bank said.
GOVERNMENT LOANS
Interest rates for capital spending declined 0.248 percentage points to 1.558 percent on average for the five major banks, dragged by loans taken out by government agencies, the central bank said.
Government agencies enjoy lower borrowing costs due to their strong credit standing.
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