National Bank Chairman Timur Suleimenov said how loan rates will decline after the base rate change. This was reported by Qazaqyia.kz citing Sputnik Kazakhstan.
Today the National Bank again lowered the base rate. Thus, since June the base rate has fallen from 18 percent to 16.25.
According to the bank's head, Timur Suleimenov, after the base rate changes, commercial banks do not immediately lower loan rates. The reason is that when banks borrow and lend money, a specific rate is fixed in loan agreements. Depending on the contract term, the rate may also be revised.
"Approximately 9-12 months, for some credit products more time is needed. Already now loan rates are declining. For example, if you look at loan rates in the economy, since the beginning of the year they have decreased by approximately plus or minus 1 percentage point. Therefore, we can say for sure that loan rates will decline," Suleimenov said at a briefing in Astana.
It is worth noting that as the base rate set by the National Bank decreases, loans should become more affordable. This is because the interest markup on borrowed money decreases. However, along with the base rate, deposit rates also decline.