Open Data Albania has undertaken a research on interest rates on loans and deposits in the domestic banking system during 2004-2013 . According to data from the Bank of Albania, the average monthly rate of loan in local currency fell 8.9 % in December 2013 in accordance with reduction of interest rate set by the Bank of Albania , at 3 %.


Source: ODA
Processing and comments: ODA

Data analysis concludes that loan interest rates have decreased over the last months of 2013 , marking the minimum level at the end of December 2013. But much more rapid has been the fall of interests of deposits in the banking system. Against interest rate fall, the banks have reacted quickly by reducing the interest rates .

At the end of December 2013, the interests of one -year deposits to total deposits, that dominate the system, fell to 2.5 % , two times lower than December 2012.


Source: ODA
Processing and comments: ODA

This is reflected in less incomes for individuals and businesses that have deposited their money in the bank . It is observed, from the data processed on the average interest on loans and deposits ( ODA accrued interest from the collection of over 12 months of the year and divided this sum by the total number of months ) that despite the cut of base rate interest by the Central Bank that has led to a contraction in interest rates , the difference between interest on deposits with those on loans, has deepened.

Banks are not very attractive to attract  customer deposits with low interest, but continue to be solid and maintain high interest margins on loans. Based on the average of 2013 , loan interest rates of the loans are 6.1 % higher than deposit interest rates.


Source: ODA
Processing and comments: ODA

Against the continuing decline of interest rates on deposits, customers have reduced the pace of depositing money in the bank, pushing deposits in contraction during 2013. The trend may be even more negative during  2014 , as the Central Bank has cut again its key interest rate again, reaching a historical minimum of 2.75 % .