In El Salvador, it was announced that as of September 2, the interest rate for the purchase of recovered homes will be reduced from 6% to 3%, while for homes of up to $25,000 the rate will be 4% for loans granted by the Social Fund for Housing.
The new conditions will apply to the formal sector, for new housing with a price of up to $25,000 dollars, which will offer an interest rate of 4% and zero premium, informed the Salvadoran government.
A request has been made that the interest rate paid by the government for using funds from the Pension Trust Bond rise from 1.3% to 7.5%.
Elsalvador.com reports that "... The leaders of the Committee requested yesterday that a new article specifically state that pension funds earn the passive base interest rate used for investments of 180 days and published by the Central Bank plus 3.5% ..
A bill on preferential interest rates suggested by the industry would reduce the cost of a home loan by up to 50% and boost construction in the country.
In order for the construction sector to recover from a 2013 that ended with a negative number it is necessary to reduce interest rates on mortgage loans so that more people are able to buy a home, therefore the business sector is recommending a proposal for a law on preferential interest, which was proposed more than six years ago.
Access to credit could get more expensive due to liquidity constraints and a higher country risk.
According to the Central Reserve Bank (BCR), last June returns on savings invested for 180 days was 3.44% while in the same period of 2012 the figure stood at 2.49%. In addition, interest rates on loans for over a year are 9.75% and in June 2012 they were 8.50%.
The Superintendency of Competition has started an investigation into the recent increase in lending interest rates of some Salvadoran banks.
From a press release from the Superintendencia de Competencia (SC) of El Salvador:
The Superintendency of Competition is investigating whether the recent rise in interest rates for loans from certain banks could respond to an alleged agreement between competitors to "compensate" for the elimination of charging an administration fee. The Superintendent will be requesting information from affected consumers.
The Central Reserve Bank of El Salvador has announced in a statement the entry into force of the usury law on February 24.
A statement from the Central Reserve Bank of El Salvador reads:
The usury law, which aims to "prohibit, prevent and punish usurious practices, in order to protect the rights of ownership and possession of the people", entered into force on 24 February this year, informed the Central Reserve Bank of El Salvador.
A study by a Salvadoran consumer rights organization found that most store cards charge annual interest rates of between 36% and 91%.
El Salvador's Credit Card Law, approved last November by the Legislative Assembly, regulates transactions made using credit cards. However, cards offered by shops and stores that use a contract as confirmation of the agreement fall outside this law.
The Superintendent of Competition conducted a study on the credit and debit card market between April and August.
Journalist Daniel Choto wrote in Elsalvador.com: "The research will include an analysis of legislation, marketing strategies, management, costs, pricing policies and interests, as well as licenses to operate such services. What is sought, among other things, is whether there is a dominant position of one issuer."
Despite the measures adopted by the Executive to guarantee liquidity, the price of money continued to rise in December.
Elsalvador.com reports: "During the last of quarter of 2008 the interest rate for one year loans increase by one point to 9.58%, according to figures by the Central Reserve Bank (BCR), while for loans for more than a year, it grew 0.65%, to 10.46%.