The Bank of Lithuania on Monday set the six-month rate at 0.49 percent, down from 1.01 percent on Friday. The three-month rate declined by 0.35 percentage points to 0.4 percent.
“It’s a good piece of news for banks’ debtors since the benchmark used to establish loan interest has fallen to historic lows as a result of changes to the procedure used to determine VILIBOR,” Giedrius Simonavičius, the central bank’s spokesman, told BNS.
According to the Bank of Lithuania’s data, the previous record low for six-month VILIBOR rate, of 0.62 percent, was recorded in February 2013, and for three-month VILIBOR, of 0.47 percent, in January 2013.
The central bank from now on will calculate VILIBOR based on quotes from banks whose rating is no more than two tiers below the lowest rating assigned to Lithuania. These banks are SEB, Swedbank, DNB, Nordea and Danske.
Until now, VILIBOR was determined on the basis of the rates provided by Medicinos Bankas, SEB Bankas, Swedbank and Šiaulių Bankas.
The Bank of Lithuania says that the procedure has been changed due to a recent decline in interbank market activity and expects that the new procedure will reflect the situation in the market more precisely.
VILIBOR rates are fixed and announced daily.