Bank lending-deposit spread

This economic indicator is derived from the electronic repository of the IMF’s International Financial Statistics, focusing on the financial dynamics between lending and deposit rates. It represents the differential between the interest rate that banks apply to loans extended to the private sector and the interest rate offered on three-month deposits. By analyzing this disparity, one can gauge the profitability of lending activities versus the attractiveness of deposit placements, providing insights into the overall health of the banking sector and credit availability. A wider gap often indicates a higher risk premium on loans, while a narrowing spread may suggest increased competition among banks or shifts in monetary policy, reflecting evolving economic conditions. Source: