Why Loans Remain Expensive Despite a 6.5% Policy Rate: AFM Team Analysis

The AFM team reviewed the latest data from the Central Bank and current lending conditions to help you understand whether it makes sense to wait for lower rates or make a decision now.

The policy rate currently stands at 6.5%, while annual inflation is 3.8%. At first glance, the rate appears moderate, with a gap of about 2.7 percentage points between the two. This indicates that the regulator is not pursuing an aggressively tight monetary policy.

However, from a borrower’s perspective, what matters more is that even at this level, mortgage and consumer loan rates remain noticeably higher. The reason lies in the cautious stance of both the regulator and commercial banks.

The credit-to-GDP gap stands at 1.93%, meaning lending is growing faster than its long-term trend. This is not a critical zone, but it signals the need for prudence. As a result, banks continue to maintain higher risk margins in their pricing.

In addition, a countercyclical capital buffer of 1.75% remains in place, requiring banks to hold additional capital. For the financial system, this strengthens stability. For borrowers, it means limited room for rate reductions.

What this means for you:

1. A rapid and sharp decline in lending rates is unlikely in the near term.
2. If financing is urgent, your decision should be based on current bank offers rather than expectations of a policy rate cut.
3. If the purchase is not critical, monitoring inflation trends and Central Bank decisions makes sense, as sustained easing would create real conditions for cheaper mortgages and consumer loans.

Under current conditions, the policy rate may look moderate, but this does not automatically translate into lower borrowing costs in the market.