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PRESS RELEASE July 24, 1997

World Bank Announces Latest Interest Rates and Interest Spreads

The International Bank for Reconstructionand Development (IBRD), a member of the World Bank Group, has announced the latest interest rates for its currency pool loans and the interest spreads for its single currency loans. 1

Currency Pool Loan Rates

For loans made under, or converted to, the IBRD's current variable lending rate system, the rate is 6.54 percent, down from 6.70 percent, charged during the past six months.

For older variable-rate loans that have not been converted to the current system, the interest rate is also 6.54 percent, down from 6.65 percent for the previous period.

The above interest rates are to be charged for the six-month period that began July 1, 1997.

Single Currency Pool Loan Rates

The rates for loan or loan portions converted to Single Currency Pool (SCP) terms for interest periods commencing between July 1, 1997 and December 31, 1997 with US dollar and Deutsche mark as the designated currencies will be the same as for the IBRD's current lending rate system-6.54 percent.

LIBOR-Based Single Currency Loan Spread

For LIBOR-based single currency loans, the total spread over LIBOR is 15 basis points.

The lending rates to be charged will be based on six-month LIBOR in the currency chosen by the borrower for value on the relevant rate-setting date during the six-month period starting July 1, 1997.

Fixed-Rate Single Currency Loan Spread

For fixed-rate single currency loans, the total spread over the appropriate maturity swap rate (fixed-rate equivalent of LIBOR) is 44 basis points for US dollar loans, 53 basis points for French franc loans, and 54 basis points for Deutsche mark loans-the currencies in which disbursement is expected.

These spreads will apply to any rate-setting during the six-month period that began July 15, 1997.

 

1 The single currency loan (SCL) program was expanded in fiscal year 1995 to provide borrowers with a greater choice of loan terms. In addition to currency pool loans with a variable rate, eligible borrowers may opt for single currency loans with a LIBOR-based rate or a fixed-rate. The SCL program was further expanded in fiscal 1996 in two ways: first, borrowers may select loans denominated in a single currency for new loan commitments (currently $12-14 billion equivalent annually) without volume restriction; and second, borrowers will be able to convert the terms of their existing currency pool loans-made by the Bank since 1980's to the offered currency of their choice.


PRESS RELEASE NO: 98/1424

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