ECB: Euro-Zone Loan, Deposit Rates Fell Again In September

FRANKFURT -(Dow Jones)- Most interest rates on new loans and deposits from banks in the euro area fell again in September, as the effects of the European Central Bank's loose monetary policy continued to feed through to the economy, the ECB said Monday. The data reflect the ECB's traditional belief that its interest rate actions take up to 18 months to have their full effect on the economy in the 16 countries that use the single currency. Rates have fallen steadily throughout the year after the ECB cut its key refinancing rate to 1% from 3.25% in the aftermath of the global financial crisis. However, that hasn't stopped demand for new credit weakening sharply. Overall lending volumes to the private sector were lower in September than they had been a year earlier, according to the ECB's M3 money-supply data released last week. Rates for retail savers fell by a weighted average of 0.11 percentage points to 1.61% for deposits with an agreed maturity of up to one year, while rates for comparable corporate deposits fell by 0.04 percentage points to 0.69%. Rates for new loans also fell in most cases. Loans with either floating rates or fixed for less than a year saw rates fall by 0.19 percentage points to an average-weighted 2.81%, while rates on loans fixed for between five and 10 years fell 0.06 percentage points to 4.48%. Residential mortgage rates fell on average by 0.04 percentage points to 4.24%, the ECB said. For companies, loan rates fell by an average of over 0.20 percentage points, to 2.09% for loans under EUR1 million and to 3.62% for loans with rates fixed for over five years. ECB Web site: www.ecb.int -By Geoffrey T. Smith, Dow Jones Newswires (+49 69) 29725-520; geoffrey.smith@dowjones.com