Bank of Portugal announces revision of effort rates to increase access to housing credit

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The deputy governor of the Bank of Portugal, Clara Raposo, said today that the central bank will review the calculation of the effort rate, thus allowing more families to access home loans.

In an interview to Antena 1 and Jornal de Negócios, Clara Raposo revealed that this decision will be taken later this year for the new credits.

“I think it makes sense for us to review the macropudential recommendation,” he noted.

Even because, said the representative, “now we have this summer period and a better ability to predict the future evolution of interest rates” to do so.

“We are looking at lowering the extra shock here a little bit,” and if this is done, he continued, “in principle we will have more households that will be able to access credit.”

There is “that will” for the measure to be taken this year, he revealed in the same interview.

About the renegotiations of housing loans, Clara Raposo did not advance with concrete numbers, but said that the existing data is not worrisome.

“In the dialogue with the banks and in the numbers we have so far, we haven’t found a number that concerns us that much about defaults or difficulties for families to meet their obligations,” he said.

And according to the deputy governor, the bad debt figures did not change significantly between the end of last year and the first quarter of this year.

Clara Raposo also said that she understands the concerns of the finance ministers who think that the interest rate hikes were already enough to avoid a more recessive effect.

But he clarifies that the measures implemented by the Portuguese government to minimize the impact of rising interest rates and inflation do not go against the determinations of the ECB (European Central Bank), admitting, however, that there may be a surgical review to maintain some fiscal discipline.

Questioned about the ECB’s policy of increasing interest rates, Clara Raposo stated that she was not sure about the need to increase them in July, because it is necessary to give time for the previous increases to produce effects in the economy.

Still he considered that, psychologically, the agents are already prepared for this increase.

The vice-governor also appealed to the companies to reflect in the consumer prices and in their profit margins the reversal that has already occurred in the energy market and that has led to increased costs in the companies.

However, she does not believe that companies deliberately took advantage of the increase in inflation. What happened was that some identified sectors took advantage of the situation, and this, said the representative, “has a limit”.

In this sense, Clara Raposo calls for a general contribution from companies and workers.

Also in the interview released today, the vice-governor also called for “a waiting period to achieve a drop in inflation that convinces everyone in Europe.

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