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PRESS RELEASE January 5, 1987

World Bank Reduces Interest Charges

The World Bank has lowered the interest rate it charges on loans to developing countries from 8.23 percent to 7.92 percent for the six months beginning January 1, 1987.

This is the ninth consecutive semi-annual reduction since July 1, 1982, when the Bank, formally known as the International Bank for Reconstruction and Development, adopted a policy of variable rates for new loans. For the first six months under that policy, the rate was 11.43 percent. More recently, it was 8.50 percent for the first half of 1986, and 8.23 percent for the six months that began July 1, 1986.

The rate is calculated by adding a spread of 0.5 percent to the weighted average cost during the most recent six months of a "pool" of World Bank borrowings. The pool consists of all outstanding borrowings made since the start of the variable rate program.