The Average Interest Rates on Loans in Euro Are Rising
The average interest rates on loans in euro are increasing, along with the volume of new credits taken by businesses. Despite the rise in average interest rates on housing loans in local currency for households, the interest in these loans remains high, and the volume of new loans is growing. There is also an increase in the volume of pre-agreed loans and refinancing loans for consumption and housing. In June, the average interest rate on loans up to 1 million euros, agreed in local currency for non-financial enterprises, decreased to 4.23%, while for those above 1 million euros, it dropped to 4.17%. The average interest rate on loans has been affected by the current economic conditions.
Analysis of Interest Rates by the Bulgarian National Bank
The Bulgarian National Bank has reported an increase in interest rates for loans up to 1 million euros. The interest rate for loans in euros has risen to 4.96%, while for loans over 1 million euros, it has jumped to 6 percent. In their analysis, the central bank notes that in June, the average overdraft interest rate in Bulgarian Lev remains at 3.62%, while the interest rate for overdrafts in euros has decreased to 5.27%.
Furthermore, the volume of new business loans up to 1 million euros, denominated in Bulgarian Lev, has increased by 21.1% (73.3 million BGN) to 420.1 million BGN. On the other hand, loans over 1 million euros have seen a growth of 38.7% (174.9 million BGN) to 626.4 million BGN. This indicates a positive trend in lending activities in the country.
Decrease in Loans and Increase in Borrowing Costs
In June, loans in the local currency experienced a decrease of 5.7%, totaling 342.3 million leva. However, the volume of new business loans in euros, for amounts up to 1 million, increased by 0.6% to 87.2 million leva. On the other hand, loans exceeding 1 million euros saw a significant increase of 61.7% to 905.3 million leva.
When looking at the total volume of pre-agreed loans and refinancing loans in euros, there was a notable increase of 24.1%, reaching 530.9 million leva. In terms of consumer loans in the local currency, the average interest rate for households decreased to 8.95% in June, with the annual percentage rate (APR) dropping to 9.53%.
Changes in Interest Rates on Loans in Leva
Recently, there have been some fluctuations in the interest rates on loans in Leva. The average interest rate has increased to 2.52%, while the APR on these loans has risen to 2.82%. On the other hand, the average interest rate on other loans in Leva has decreased by 0.41% to 3.63%.
Moreover, the average interest rate on loans for employers and self-employed individuals has also decreased by 0.41% and is now at 3.60%. In June, the average interest rate on overdrafts in Leva has increased to 14.68%, while for credit card loans, outside the interest-free grace period, it has decreased to 20.65%.
Despite these changes, the volume of new business on consumer loans in Leva has also decreased. It is important for borrowers to stay informed about these fluctuations in interest rates in order to make informed decisions about their financial choices.
Significant Increase in Credit Volume
The total volume of credits in the local currency has seen a substantial increase, rising from 1.2% (10.5 million BGN) to 848.1 million BGN. Meanwhile, the volume of pre-agreed credits and refinancing credits has also risen by 4.8% (5.5 million BGN) to 121 million BGN.
For housing loans in BGN, the volume of new business has grown by 13% (102.1 million BGN) to 888.8 million BGN, while the volume of pre-agreed credits and refinancing credits has increased by 5.5% (8.8 million BGN) to 167.7 million BGN. The volume of new business for other credits in BGN has skyrocketed by 73.6% (14.3 million BGN) to 33.8 million BGN, and the volume of pre-agreed credits and refinancing credits has also surged by 67.6% (4.5 million BGN) to 11.3 million BGN.
Increasing Trends in Deposits and Interest Rates
The volume of deposits in Bulgarian lev terms from employers and self-employed individuals increased by 80.5% to 31.4 million lev. In June compared to May 2024, the average interest rate on deposits with agreed maturity in lev for companies decreased to 1.82%, while for those in euros it decreased to 2.42%. The average interest rate on overnight deposits in lev remained at 0.05%, while in euros it slightly increased to 0.09%. The volume of new business in deposits with agreed maturity in lev increased by 135.3% to 1.003 billion lev, and in euros by 6.4% to 37.7 million lev.
Interest Rates on Deposits Increase in June
In June, the average interest rate on deposits with agreed maturity in Bulgarian Lev for households increased to 0.99%, while for those in Euro it rose to 1.60 percent. The average interest rates on overnight deposits in Lev and in Euro remained at their levels of 0.01 percent. The average interest rate on deposits agreed for use after notice in Lev remains at 0.10%, while for those in Euro it slightly increases to 0.16 percent. The volume of new business on deposits with agreed maturity in Lev increased by 27.3% (61.2 million Lev) to 285.7 million Lev.
Interest Rates in Euro on Deposits
In June, the agreed maturity interest rate in Euro on deposits increased to 12.8% (28.2 million leva) to 248.7 million leva. The main interest rate (MIR) in June is 3.78%, remaining unchanged compared to May this year. The LEONIA Plus index decreased by 0.16 percentage points to 3.63 percent in June. The interest rate on excess reserves is 0.00%, maintaining its level compared to May 2024. The long-term interest rate for assessing the degree of convergence in June is 3.93%, remaining unchanged compared to May this year.