As reported by the Bank of Lithuania, here are the latest developments of interest rates on loans and new business of deposits with agreed maturity of euro area credit institutions to euro area residents.

• A comparison of June and March 2024 data shows a drop in all relevant interest rates.
• In June 2024, interest rates offered to households on all deposits with agreed maturity were above the euro area average interest rates on deposits with a maturity of over two years were the highest in the euro area.
• In three months, both the interest rates on loans granted by credit institutions operating in Lithuania to non-financial corporations and the average interest rates on these loans decreased to 6.37% and 4.97% respectively. In Lithuania, however, these rates were the highest among euro-area countries.
• Both the interest rates on housing loans granted by credit institutions operating in Lithuania to households and their euro area average declined to 5.44% and 3.73% respectively. Lithuania remained in the third highest position.
• Both the interest rates on loans for consumption granted by credit institutions operating in Lithuania to households and their euro area average dropped to 9.59% and 7.71% respectively. Lithuania remained in the fourth position.

In this scenario, deposits of Lithuanian residents held with credit institutions rose by 2.3% over the month (their annual growth rate was 7.2%). Deposits of non-financial corporations and households increased by 1.6% and 0.6%, respectively (their annual growth rates stood at -3.3% and 8.8% respectively). Household and non-financial corporation deposits amounted to €23.4bn and €10.1bn respectively.

Despite the higher rates compared to other EU partners, loans granted by credit institutions to Lithuanian residents increased by 1.5% MoM (their annual growth rate was 9.9%). Loans to Lithuanian households and non-financial corporations went up by 0.9% and 3.2% respectively (their annual growth rates stood at 7.3% and 12.5% respectively).

Loans to Lithuanian households for house purchase, consumption, and other purposes granted by credit institutions rose by 0.8%, 2.2%, and 0.5% respectively over the month. The outstanding amounts of these loans totaled €12.7 billion, €1.2 billion, and €1.3 billion respectively, and their annual growth rates stood at 6.5%, 22.0%, and 2.6% respectively.

At the same time, interest rates on new business loans granted to households by credit institutions fell to 6.53%. Interest rates on loans for house purchases declined by 0.08pp, while those on loans for consumption and other purposes increased by 0.29pp and 0.11pp respectively. In July 2024, interest rates on these loans comprised 5.36%, 9.88%, and 7.54% respectively.