Interest rates began to fall from about July 1998 (table 5),
although it can be seen that prime rates have not been falling as rapidly as the short-term
interest rates. The outcome for the real sector has been a severe shortage of liquidity. The
economy got into a vicious downward spiral, with economic recession leading to more NPL,
7
leading banks to struggle further with provisioning and capital increases, and become even
more reluctant to lend to the real sector