Will interest rates drop as of June?

In seven days, the European Central Bank (ECB) is expected to announce lower interest rates which have been going up for the past two years.

While European bankers assure that it is time for borrowing to become cheaper, estimates by the American FED warn that inflationary pressures are not easing fast enough, so interest rates could remain high and longer than expected. The borrowing cost in Serbia depends on the decisions of the European Central Bank and domestic factors, according to the National Bank of Serbia (NBS).

A week after the ECB makes a decision, the NBS will also decided whether it will lower the benchmark interest rate which has been stagnant for 10 months, i.e. it’s been 6.5 percent since last August. As stated, the decision on lowering of the benchmark interest rate depends on both national and international factors.

“These include geopolitical tensions, the influence of global crude oil prices and main agricultural products and numerous factors in the country, like the results of the agricultural season, the domestic demand, etc.”, according to the deputy general director of the NBS Economic Research and Statistics Sector, Mirjana Miletić.

She adds that the NBS Executive Board will adhere to the principle of prudence in the decision-making process, taking into account the risks.

“The risks are smaller, but they are still present and primarily stem from international factors,” said Miletić.

If the circumstances are favourable, it has been estimated that as of next year, 150,000 people who took out housing loans will have monthly loan payments reduced.

“Unfortunately, I cannot say with certainty that interest rates will be significantly reduced. We had a situation where the benchmark interest rate went up from negative Euribor to 4 percent. Something like that will certainly not happen now. At the same time, we have a moratorium on interest rates in place in Serbia imposed by the NBS”, says Professor Milan Nedeljković from the FEFA Faculty.

(RTS, 30.05.2024)


This post is also available in: Italiano

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