Interest rates for new loans at the nation’s five major state-run banks last month rose 0.128 percentage points to 1.421 percent, as lenders increased borrowing costs nearly across the board in response to the central bank in March raising interest rates 25 basis points, the monetary policymaker said yesterday.
The average lending rate rose to 1.557 percent, up 0.206 percentage points, after stripping interest rates for US Treasury notes, the central bank said, after comparing data at 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).
However, loan demand cooled as companies and people became more cautious due to monetary tightening, soaring COVID-19 infections and global economic uncertainty, the central bank said.
Interest rates for new mortgages rose 0.183 percentage points, but volume fell by NT$12 billion (US$405.13 million), central bank data showed.
The bank attributed the retreat to cautious sentiment induced by four waves of credit controls, interest rate hikes and rampant COVID-19 infections.
Buying interest cooled somewhat this month, much as it did during a level 3 COVID-19 alert last year, the central bank said, adding that more observation is necessary to determine if it was just a transient phenomenon or an indicator of a market turnaround.
People with real demand might refrain from searching for real estate to avoid possible COVID-19 infection, but would come out once the outbreak stabilizes, the central bank said.
Interest rates for consumer loans added 0.085 percentage points with loan demand gaining momentum, thanks to an increase in student loans, the central bank said, adding that student loans usually peak in April and May.
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