Ceiling on dollar deposits set at five percent, 8.5 percent on lira
The Central Bank (BDL) has set the maximum interest rate that the banks must pay on deposits in foreign currencies at five percent. Rates for deposits in lira have been set at 8.5 percent. Rates on existing deposits will remain unchanged until they reach maturity.
Current effective interest rates have varied from around six percent to ten percent on foreign currency deposits and from seven percent to 15 percent on lira deposits. The weighted average interest rate on deposits in lira was 9.13 percent in Sept. 2019 and 8.3 percent in Dec. 2018. The corresponding rate on dollar deposits was 6.57 percent and 5.15 percent respectively.
The banks are required to pay in lira half of the interests they owe to their clients on foreign currency deposits, according to a circular by BDL. They will continue to pay the other half of the interest amount in foreign currencies.
Reported by Shikrallah Nakhoul