Politics

Coroanvirus: German interest rates on the rise due to crisis

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Via Deutsche Welle

Despite coronavirus gloom, savers are being treated to a rise in short-term interest rates offered by banks interlinked with cash-needy industry, reported the Süddeutsche Zeitung (SZ) newspaper late Saturday.

“We expect the trend to strengthen,” market analyst Andre Salzwedel told SZ.

The paper cautioned that the trend was limited to banks and finance brokers directly linked with industrial sectors.

In a tabular line-up, one financial services provider was reportedly offering potential savers 1.05% for a €10,000 ($11,168) deposit over 12 months. Savers depositing for 6 months were being offered around 0.5%.

Read more: Germany’s coronavirus aid package gets final approval

Novelty for savers

Such a trend is a novelty for savers long used to the European Central Bank’s low interest policy, said the SZ, referring to the lingering aftermath of the global 2008/2009 financial crisis.

“Since the Corona crisis deepened, it’s turned in a different direction,” noted the SZ. “Financial institutions are on the look-out for liquidity.”

Share market slump

On a sober note, the SZ observed that since 2009 investors had been enticed by advisors to speculate on soaring shares — now down around 40% in the pandemic.

In recent days, German associations representing craftsmen, travel bureaus and small family-run businesses have pressed government for urgent loan bailouts.

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