ECB Rate Hike May Slow Down Interest Rate Decline in Montenegro

The European Central Bank (ECB) has increased its key interest rates by 0.25 percentage points, but this decision will not automatically lead to an increase in loan installments for citizens in Montenegro.

According to the Central Bank of Montenegro (CBCG), the effects of European monetary policy on the domestic banking market may be gradual, and a sudden change in interest rates is not expected.

The CBCG explained that the direct exposure of the domestic banking system to changes in European interest rates is limited due to the small share of loans with variable interest rates and the method of financing banks.