The increase has been triggered by the central bank’s decision to add Medicinos Bankas to the list of five banks, which are used to calculate VILIBOR, a daily reference rate based on the averaged interest rates at which those banks offer to lend litas to other banks. The rates at which Medicinos Bankas says to be ready to lend money to other lenders are the highest.
“VILIBOR doesn’t always reflect changes in borrowing prices objectively, not least because it is fixed on the rates declared by just five banks, whereas EURIBOR is based on the rates of 37 banks, and LIBOR – on the rates of 15 banks. It would be useful to consider a possibility to fix VILIBOR on the basis of interbank deposit transactions, although they are not that numerous, or on the basis of interbank currency swaps. Although they do not show the borrowing price in terms of interest, it can be calculated,” Mantas Gikys, head of treasury division at DNB Bankas, told the daily.
Irrational changes in interest rates, which affect the debtors immediately, should prompt the central Bank of Lithuania to reconsider whether it might be useful to modify the methodology of VILIBOR fixing, he added.
