In recent weeks, the country's financial system has seen a considerable drop in the lending rate on new loan operations, which is partly explained by the reduction in the Monetary Policy Rate.
According to reports from the Central Bank of Honduras (BCH), between March 9 and April 10, 2020, the rate fell from 14.81% to 10.31%. This fall is being recorded in the context of the health crisis caused by the outbreak of covid-19.
For class "A" businesses, the lending rate in domestic currency now stands at 14.7% and 7.2% for loans in foreign currency.
A 100 basis point increase in the Monetary Policy Rate (MPR) decreed by the Central Bank of Honduras on 14 May, is the main reason behind this increase.
After the hike in the monetary policy rate, the response from the Honduran Association of Banking Institutions (Ahiba) was given immediately: "the action of the board of BCH has resulted in increases in interest rates, increasing borrowing costs and reducing the circulating currency, thereby affecting the availability of credit for the private sector. "
Fitch Ratings reported that the risks to regional banks during the current crisis are growing and represent a major challenge for 2009.
The combination of reduced credit expansion, fund restrictions and increasing loan provisions have limited the profits of most banks and it is expected for these factors to continue to pressure the results in the coming months.
Fitch Ratings reported that the risks to regional banks during the current crisis are growing and represent a major challenge for 2009.
The combination of reduced credit expansion, fund restrictions and increasing loan provisions have limited the profits of most banks and it is expected for these factors to continue to pressure the results in the coming months.
In January, banks charged 13.16% to loan money and now they charge 14.85%, while what they pay for deposits was reduced from 4.75% to 4.38%.
The weighted average interest rate which the banking system charges for loans in national currency, were at 14.85% at the end of September, according to the Superintendence of Banks (SIB). This represents an increase of 1.69 percentage points when compared to the amount recorded in January, when it was at 13.16%