The World Bank has lowered the interest rate it charges on loans to developing countries from 7.92 percent to 7.76 percent for six-month payment periods that begin between July 1 and December 31, 1987.
This is the 10th 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. Before then the fixed-rate on loans had been 11.6 percent. More recently, the variable rate was reduced to 8.23 percent on July 1, 1986 and to 7.92 percent on January 1, 1987.
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.