Photo: freepik.comNikola Dragašević, General Manager of the Monetary and Foreign Exchange Operations Department of National Bank of Serbia, said that a session of the NBS Executive Board would be held today, at which, among other things, the reference interest rate would be discussed. He emphasized that he does not expect drastic changes when it comes to loans that are important to citizens – housing loans, which are Euro-indexed.
While interest rates are lower than inflation, we can say that such loans are extremely favorable, that you can even make money on them. How long it will take and whether the change is possible overnight, depends at least on the bank where you take them. Economists advise that loans should be taken in the short term in the next period, and if long-term housing is necessary, it should be with a fixed interest rate, which is still slightly higher.
Will the US Federal Reserve raise interest rates again at the May session, what will the Central Bank of the European Union decide, even for our dinar loans, will the National Bank raise the reference interest rate? In an interview for RTS, Dragašević said that the executive board of the NBS is sitting today, which is a regular monthly session at which, among other things, the reference interest rate will be discussed.
"The reference interest rate is the basic interest rate that affects all other interest rates on the money market, but also in the real sector - interest rates on loans and deposits," he explained.
According to him, the NBS decided in April to change the reference interest rate due to inflationary pressures, which is now a global phenomenon.
Dragašević said that the NBS started reacting in October last year, choosing a gradual approach that is in line with the nature of inflationary pressures.
"It was estimated that inflationary pressures would be shorter-term and could be less intense, so we acted immediately," he said.
The General Manager of Monetary and Foreign Exchange Operations Department of National Bank of Serbia said that the reference interest rate was increased in April and that this was the beginning of the tightening of monetary policy.
"The NBS Executive Board is considering the domestic situation, but also the environment and the overall macroeconomic situation, and everything that this reference interest rate can affect," he said.
Dragašević also pointed out that the European Central Bank is expected to increase the basic interest rate, because, along with the Bank of Japan, it is one of the few that has not yet begun its process of tightening monetary policy. One of the reasons is the lack of consensus among members of the European Central Bank. The market expects this to start this year, Dragašević pointed out, adding that there were hints that there would be an increase in the reference interest rate of the ECB.
He emphasized that the market expects that the European Central Bank could increase the base interest rate three times by 25 basis points this year, ie the base rate of the European Central Bank should be increased by 0.75 percent.
When it comes to the dinar exchange rate, he says that the demand for foreign currency has increased, the NBS has reacted and calmed the pressures, and now the citizens are again sellers of foreign cash, which contributes to the strengthening of the dinar.
"The course will depend on global trends in the coming period, but the NBS will ensure stability," he pointed out. He emphasized that he does not expect drastic changes when it comes to loans that are important to citizens, and those are housing loans that are Euro-indexed.
"Euribor as a benchmark interest rate will certainly increase, at the very suggestion of the European Central Bank, it has already decided," Dragašević noted. We expect that it will not be drastic and abrupt, and he expects the savings rates to grow as well.
Source: rts.rs
