Local body interest rates up
PA Wellington Higher interest rates for local authorities loans were announced yesterday by the Prime Minister and Minister of Finance (Mr Muldoon). The new rates, set following last week’s announcement of higher rates for central government borrowing, apply now.
The rate for one' year goes up from 9.5 per cent to 11.5 per cent, and the rate for six years is up from 10.5 per cent to 13.5 per cent. Terms of ten years, and more will have a rate of 11.25 per cent, compared with the present 10.5 per cent.
Mr Muldoon said the new rates were intended to maintain competitive margins for local authority stock, compared with the new rates for government stock.
The interest rates should be compared with the rate inflation to see if the lender was receiving an adequate after-tax reward, he said. The new rates, with the old ones in brackets, are: 1 year, 11.5 (9.5); 2 years, 11.5 (10); 3 years, 12.5 (10.24); 4 years, 12.5 (10.24); 5 years, 12.5 (10.24); 6 years, 13.5 (10.5) 7-9 years, 12 (10.5), and 10 years or more 11.25 (10.5)
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Press, 20 April 1979, Page 12
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188Local body interest rates up Press, 20 April 1979, Page 12
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