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Bulgaria's Loan Interest Rates Fall For The First Time In 18 Months

Loan interest rates in Bulgaria decreased for the first time in almost a year and a half, according to central Bulgarian National Bank data.While both corporate loans and housing mortgages grew cheaper in February from January, they remained higher on an annual basis.New lev-denominated business loans of up to a million euro came with an average interest rate of 11.99 per cent, 0.43 percentage points lower than the previous month.The rate of euro-denominated loans dipped 0.16 points to 9.38 per cent.Local-currency corporate loans of more than a million euro shed 1.48 points to 8.34 per cent, but euro-denominated loans edged up 0.87 points to 8.89 per cent.Average household mortgage rates fell by 0.54 points to 9.95 per cent for lev-denominated loans and by 0.36 points to 8.23 per cent for euro-denominated loans.As a result, annual percentage rates (APR) fell 0.62 points to 10.63 per cent on local-currency mortgages and 0.29 points to 8.98 per cent on euro-denominated loans.However, consumer loan prices continued to move in the opposite direction, even by a tiny 0.08 points to 12.5 per cent on the month, or 2.32% on an annual basis.February's downturn was triggered by the deep cut in market indices that form end customers' interest rates - the Euro Interbank Offered Rate (Euribor), the Sofia Interbank Offered Rate (Sofibor) and the benchmark interest rate of the Bulgarian National Bank (BNB).While both the six-month and the three-month Euribor were above the five per cent mark in the autumn, in March 2009 they slipped below two per cent. The key rate dropped more than five per cent to below four per cent.