Govt. likely to freeze interest rates in 2004

Paraguay's government is likely to implement an interest rate ceiling in the first half of next year to seek to boost lending in a bid to jumpstart the sluggish economy, a central bank spokesperson told BNamericas. The government is currently seeking to push through the bill through Congress that will set a 65% annual interest ceiling on consumer loans and credit card debts, he said. Today, banks and finance companies often charge their clients much more than 65% annually on their consumer loans and credit card debts. Several banks even charge their clients annual interest rates of between 90% and 95% for credit card debts because they charge an additional interest on the standard interest rate, the spokesperson said. The Paraguayan government has said that one of its top priorities for next year will be to lower the cost of financial intermediation to facilitate the public's access to financial services to stimulate spending and consumption.