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Association of Banks expects optimization of interest rates

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In the coming period, interest rates could be optimized in terms of their reduction, in line with the weakening of inflation and the improvement of the business environment, says the Secretary General of the Association of Banks, Bratislav Pejakovic.

He recalls that many factors influence the level of interest rates.

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“I would like to remind you that we have a real negative interest rate in bank placements, where for 2022 the official inflation was 17%, and the average interest rate at banks is about 5.75% on an annual basis. In a one-year period, Euribor increased from 0% to over 4% in August last year, which influenced the increase in interest rates in Montenegro”, said Pejakovic.

He adds that the transfer of the impact of the increase in interest rates to the Montenegrin market was to a lesser extent than was the case with the European interbank market.

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He says that the results of the banks are a reflection of compliance with international business standards, the size of the balance sheet of about €6.8bn, inflation that increased the nominal amounts of payments, as well as the growth of Euribor as a reaction of the European Central Bank to the fight against inflation.

Pejakovic believes that Montenegro is not the cheapest, but neither is it the most expensive country in the implementation of banking services, including interest rates.

He recalls that in Montenegro there are almost 20,000 companies and entrepreneurs with blocked accounts worth around €1.2bn, as well as that the average time of court proceedings is about three years.

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