The European Central Bank has raised its key interest rates by 0.25 percentage points, but the Central Bank of Montenegro says the increase will not automatically be passed on to domestic borrowers, meaning most citizens are not expected to see an immediate rise in their loan repayments.
Economist Kasim Bajrovic said the impact will depend on how banks operating in Montenegro respond, noting that households and businesses have increasingly opted for fixed-rate loans as protection against market changes.
Economic analyst Davor Dokic, however, warned that higher interest rates will make borrowing and financing more expensive in the future, particularly for borrowers whose loans are linked to Euribor.
The Central Bank said future interest rate movements in Montenegro will depend on supply and demand, banks’ funding sources and liquidity, as well as broader economic conditions.
According to credit registry data, only 6.21% of loans in Montenegro have variable interest rates, meaning most borrowers are relatively protected from changes in market reference rates.
