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PRESS RELEASE July 2, 1984

World Bank Lowers Interest Charges

The interest rate on loans to developing countries has been reduced from 10.08% to 9.89% for the six months beginning July 1, 1984, the International Bank for Reconstruction and Development (IBRD) announced today.

This is the fourth consecutive semi-annual reduction since July 1, 1982 when the IBRD adopted a policy of variable rates for new loans. The first semi-annual interest rate under the variable rate system was 11.43% from July 1 until December 31, 1982.

The rate is calculated by adding a spread of 0.5% to the average cost during the past six months of a "pool" of outstanding IBRD borrowings which was established at the start of the variable rate system on July 1, 1982. The reduction reflects a decline in overall costs of the pool of borrowings due to the effect of new borrowing techniques, e.g. the IBRD's discount note and currency swap programs, the recently introduced Central Bank Facility, and the diverse currency mix of the Bank's borrowings.