Interest Rates Help Dealers

Analysts aren’t sure about the impact interest rate cuts are having on the economy, but some dealers say it’s helped them maintain prices.

Joseph Schlussel of New York’s Diamond Registry notes that when interest rates hit 20% in the 1980s, many wholesalers went out of business.

“There isn’t the same pressure to sell now,” he says. “People feel they can hang on to the goods a little longer.”

Jeff Pfeffer, senior vice president of New York’s Bank Leumi, adds that, since it now costs less to borrow, the bigger firms are using goods for risky memo programs instead of going for the quick buck and selling them to other dealers.

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