President and Prime Minister want banks to cut loan interest rates

Latvian President Edgars Rinkēvičs, said October 4 he expects banks to be more accommodating to customers, reducing interest payments that have increased substantially due to the recent increase in Euribor rates.

On Wednesday, October 4, after a meeting with Prime Minister Evika Siliņa at Riga Castle, Rinkēvičs told the media that discussions on support for borrowers are taking place both in the government and in the Saeima's Budget Commission, and that the banking sector must understand its responsibility.

Until now, one bank – the name of which has not been disclosed – has expressed its readiness to reduce its credit interest rates by 1%.

"We would like to see more hospitality from the other banks," Rinkēvičs said.

He added that otherwise "the possible solutions discussed in the Budget Commission and the government", for example, the plan for a 50% discount on mortgage loan interest rates for one year, which the banks strongly oppose, "will be largely also a result of the unresponsiveness of the banking sector itself, and there won't be too much to complain about."

President Edgars Rinkēvičs and Prime Minister Evika Siliņa.
President Edgars Rinkēvičs and Prime Minister Evika Siliņa.

The President expressed hope that talks will continue and this issue will be resolved.

Prime Minister Evika Siliņa (New Unity) assured the media that she has a written proposal for a temporary reduction in loan interest rates from an unnamed bank, and called on other banks to follow this example, because "the Budget Commission is quite belligerent" about the need to reduce the interest rates borrowers must pay.

The Prime Minister pointed out that if the banks themselves are accommodating, they might not be subject to legislative measures.

"I hope that the banks will be able to self-organize and make some offers," said Siliņa.

The Prime Minister also said that she will lead a working group that will look for solutions to make it easier for bank customers to switch from one credit institution to another, allowing people will be able to choose which bank offers the best solution for them.

Earlier in the day, Siliņa told Latvian Television that mortgage payers in financial difficulties could be supported with guarantees issued by the state-owned financial institution Altum, which is mainly used as a development bank rather than a commercial lender.


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