On Tuesday, July,18 many bank customers woke up with an email announcing that the reference rate for mortgage loans will increase 0.08% from August 1.

On June 29, 2023, the Panamanian banking regulatory body, the Superintendence of Banks of Panama (SBP), in A circular issued to the banks expressly states that "in accordance with article 4 of Law No. 3 of May 20, 1985, modified by Law No. 94 of September 20, 2019, which establishes a preferential interest on certain mortgage loans, we would like to inform you that the calculation of the reference rate for the third quarter of 2023 was 5.92%”."In accordance with the foregoing, the local market reference rate for residential mortgage loans, corresponding to the third quarter of 2023, is 6.00%..".

With this change, the loan rate increased 25 percentage points effective August 1. Internationally, interest rates are increasing and this is having an impact in Panama. With the arrival of the covid-19 pandemic, the economy was practically paralyzed. To partially keep it running, the governments of the different countries injected money so that their citizens will continue to make purchases. With this, they sought to stimulate the economy. But when the health crisis ended, an imbalance was generated. There was much more money in circulation than usual, and this put pressure on demand, increased prices, and led to exorbitant inflation.

The United States, for example, surpassed 9% inflation in 2022. In the last four decades, the US economy had not experienced that level of price inflation. And when inflation rises, so do interest rates. The US government began withdrawing money from the economy seeking to lower prices. And when liquidity is withdrawn, interest rates become more expensive.