Deposit interest rates in Bulgaria fall in September.

By bne IntelliNews October 26, 2012
Banks continued to lower deposit interest rates in September, according to central bank data. The sound downward trend started in 2010 when levels of liquidity in the country increased and accumulation of deposits in banks increased to a level that prompted government to call for deposit rates drop in order to stimulate consumption. Rates on household deposits increased y/y in all categories in September. The trend for corporate deposits rates was also mainly downward, with the exception of long-term deposits in euro only. A recent decision of the government to introduce a 10% tax on interest earned on household deposits in 2013 may have a certain effect on deposit rates in the country. Whether banks will respond to a likely withdrawal of deposits from the banking system by reversing interest rates trend and setting them higher will depend on the magnitude of such a withdrawal as deposits are the main source of financing in the country at present. For the time being we do not see a real threat of massive withdrawal of deposits so we do not expect surprises in interest rates direction.

Deposit interest rates in Bulgaria fall in September.

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