Financial Market Statistics, August 2007:

Varying picture for lending rates to households

The average lending rates for new loans to households from housing credit institutions rose in August 2007. In contrast, corresponding lending rates from banks fell. Over half of new loans from housing credit institutions during August had a fixed interest rate.

Lending rates for new loans to households from housing credit institutions rose on average from 4.60 percent in the previous month to 4.63 percent in August. Loans with a floating interest rate or a fixation period of up to one year accounted for this rise. For loans with fixation periods of over one year, interest rates have fallen. For lending rates for new loans from banks, the average interest rate to households fell during the last month to 6.46 percent compared to 6.53 in July.

The average lending rate for new loans to non-financial companies from MFI fell to 4.41 percent in August from 4.43 in the previous month. The majority of the lending volume to non-financial companies had floating interest rates or a short fixation period and these rates remained at roughly the same level as in the previous month. New loans taken by non-financial companies with a slightly longer fixation period of 1-5 years fell during the last month from 4.80 percent to 4.52 in August.

Lending to households
The total volume of MFIs’ lending to households amounted in August to SEK 1 890 billion, which means an annual growth rate of 11.8 percent. Housing credit institutions accounted for the largest part of MFIs’ total lending volume to households, SEK 1 343 billion in August, corresponding to an annual growth rate of 12.5 percent.

Housing credit institutions’ new lending to households amounted to SEK 32 billion in August which is an increase compared to July but still on a level with previously during the year. Of all new loans from housing credit institutions to households, more than half, 54.5 percent, had a fixed rate of interest in August. The majority of the households choosing to fix their loans chose a fixation period of five years or less.

Growth rate for M3 increases
The development of the growth rates for the two money supply measures went in different directions in August. The growth rate in M1 fell from 11.6 in July 2007 to 10.1 in August, M1 amounting in total to SEK 1 273 billion.

The growth rate for M3 rose in comparison to the previous month, amounting to 14.9 percent in August 2007, an increase from 11.6 percent in July. Above all, the increase in M3 is due to an increase in the general public's holdings in securities in August 2007. M3 amounted in total to SEK 1 942 billion.

The money supply measure M1 consists of notes, coins and current accounts (for example salary-linked bank accounts and other accounts in which money can in principle be withdrawn immediately). M3 consists of the components in M1 plus deposits with conditions, real repurchasing transactions (repo rates), shares in money market funds and securities with a duration of up to two years.