The weighted interest rates on new dinar loans in Serbia declined for a second straight month in December 2013 , shrinking by 1.1pps y/y to 17.1% following a 1.3pps y/y drop in November, central bank data showed. The reading was dragged down by falling costs of housing and consumer loans. In monthly terms, lending rates on dinar loans edged down by 0.2pps in December, after shrinking 1.5pps m/m the month before. Interest rates on new euro and euro-indexed loans, which have been on a steady downward trend since the start of 2013, continued retreating in December, shrinking 1.6pps y/y to 6.52%. They remained flat on the month. The value of newly-extended loans in both dinar and foreign currency declined 8.8% to RSD 70.0bn ( EUR 603mn ) in December, improving from a 29.9% y/y contraction in November as falling dinar lending (mainly corporate), was partly offset by rising FX lending over the period. Euro and euro-indexed loans swung to a 7.4% annual growth in December from a 40.5% y/y decline the month before, totalling RSD 48bn. The reading was mainly underpinned by higher corporate lending. Their share in total newly-extended loans increased to 68% in December from 58% a year ago. The value of new dinar credits shrank 37.4% to RSD 18bn in December after rising 1.8% y/y in November, dragged down by falling dinar corporate lending whereas loans to households increased over the period.
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