Interbank borrowing rates fell by almost 20 per cent in the third quarter, but home loan companies are holding back from passing the full benefits on to customers.
The Emirates interbank offered rate (Eibor), which banks use to lend to each other, fell to 1.98 per cent yesterday from 2.05 per cent a day earlier. The latest drop was recorded on the day the Central Bank introduced a new mechanism to set the interbank borrowing rate as it tries to bring Eibor more in line with prevailing market conditions.
Despite the sharp decline in borrowing costs over the past three months, consumers have yet to feel the benefits in the form of proportionately cheaper loans and mortgages.
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