ECB releases Euro area MFI interest rates for December

The European Central Bank has today released Euro area MFI interest rate statistics.

The following are the main developments in new business rates for Ireland in December:

Rates on overnight deposits by households increased marginally, in contrast to those on deposits redeemable at notice, which decreased in December. Both movements were less than 0.1 percentage points.

Overdraft rates to households increased from 12.81% to 12.93% following a decrease of around 0.1 percentage points in November, overdraft rates to business also increased by around 0.1 percentage points.

Rates on housing loans were largely unchanged in December for both variable and fixed-rate borrowing.

The cost of loans to households for consumption purposes showed a mixed pattern in December with variable-rate loans falling, while fixed-rate loans increased sharply.

Rates on borrowing by households for other purposes (eg business, debt consolidation, education, etc) fell by around 0.4 percentage points.

The ECB said that rates on loans to Non-Financial Corporations (NFCs) tend to be volatile, and in December, there was a decrease in rates of around 0.6 percentage points for loans over €1m, fixed for over five years.

Rates fell on all categories of loans to NFCs up to €1m, decreases were generally of the order of 0.1 percentage points.

New business volumes increased for all categories of borrowing by NFCs, and this was in line with the broadly-based increase in private-sector credit during December.

With regard to revisions for earlier months, these arise from the inconsistent treatment of overnight deposits, demand deposits and deposits redeemable at notice.

Following clarification, the ECB stated that all demand deposits are now included as overnight deposits with the following impact on rates and new business volumes:

Rates on overnight deposits to households have increased by around 0.2 percentage points on average for the months January to November 2003.

Volumes are more than €13bn higher for the same period.

For deposits redeemable at notice, rates are on average 0.55 percentage points higher for the first eleven months of 2003. Volumes are around €19bn lower in each month.

All deposits redeemable at notice are classified to the household sector.

Rates on overnight deposits for NFCs are on average 0.15 percentage points higher for the same period. Volumes are close to €6bn higher.