The World Bank is raising interest rates for relatively prosperous developing countries to 7.65 percent annually, the first such increase since the bank began lending at variable rates in 1982, officials said today.
The rate will apply during the first six months of this year on $37 billion worth of loans to about 70 countries, Sheldon Rappaport, a spokesman for the bank, said.
For the second half of 1988, the rate was 7.59 percent. Although the increase is only six-hundredths of 1 percent, it will cost borrowers an additional $11 million in all, Mr. Rappaport estimated. The rate is based on the cost of the bank's own borrowings and will be recalculated in mid-1989. The bank gets most of its funds from borrowing on world markets.
The bank is owned by 151 governments, with the United States holding the largest block of shares, and is the biggest single source of aid used to help raise third world nations' living standards. It lends more than $19 billion a year.
When it introduced variable interest rates on most of its loans in July 1982, the annual rate was 11.43 percent. Since then, the rate has been reduced each time it was recalculated, twice a year.Continue reading the main story