Montenegrin Interest Rates Unlikely to Change Sudden

Marija Šuković, the director of the Association of Banks (UBCG) in Montenegro, stated that there are no expected sudden changes in interest rate movements. The European Central Bank's (ECB) potential increase in interest rates could impact the current downward trend in Montenegro, but there are currently no indicators for significant or sudden changes.

Šuković explained that variable-rate loans only account for 6.12% of the total, and domestic banks rely heavily on deposits from citizens and businesses. The average weighted effective interest rate in July was 6.12%, which is half a percentage point less than two years ago and almost two percentage points lower than ten years ago.

Šuković emphasized that credit activity towards the population has been growing, but there are no indicators of a systemic problem of over-indebtedness among citizens. The share of non-performing loans at the end of July was 2.4%, the lowest level since 2010.