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September 26, 2024 | 3 months ago
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The initiative could stimulate the real estate market and the construction sector, which are essential for job creation and domestic economic dynamism. However, the professor warns against a possible excessive restriction of credit, which could penalize the riskiest borrowers, in particular young entrepreneurs and innovative start-ups, in a context where access to credit remains a major problem for these actors. At the monetary level, the new price list reflects the Bank of Algeria's prudent policy in the face of inflationary pressures. Commercial banks will have to adjust their lending strategies based on these ceilings, which could lead to a reallocation of credit towards sectors considered safer and less risky. This could also lead to a reduction in the volume of credit granted to sectors deemed more volatile or less solvent, he stressed.
In addition to this analysis, financial expert Souhil Meddah offers a different perspective on the implications and impact of the new interest rate caps. According to him, the adjustment of interest rate ceilings for the second half of 2024 aims to regulate the impact of costs on consumers while stimulating certain economic sectors. Interest rates have been revised downwards in favour of economic operators. For example, the overdraft threshold is now set at 8.48%, compared with 8.75% previously, and short-, medium- and long-term have also been reduced to 7.79%, 7.32% and 6.66% respectively.
This reduction favours industrial, service, and structured trading companies, offering them more flexible financing conditions, he added. On the other hand, consumer-related interest rates did not fall significantly, he noted. The rate for leasing rose slightly to 11.87% (instead of 11.75%) and the rate for home loans reached 7.63% (instead of 7.35%). This relative stability shows that the impact on household borrowing costs will remain limited in the short term," he said. This is partly due to the importance of consumer credit for economic growth, which is closely linked to the performance of local economic units producing for the national market.
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