Banking association head: We don’t expect extreme increase in interest rates

NEWS 19.05.2022 17:35
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Source: N1

Interest rates in Croatia are not expected to rise to extreme levels, Croatian Banking Association (HUB) director, Zdenko Adrovic, said on Thursday, but instead the increase will remain at rates that "most people will be able to bear."

Responding to questions from the press at a HUB conference on the impact of euro adoption on the Croatian financial sector, Adrovic said he did not know at what pace interest rates would grow, citing discussions in the Council of Governors at the European Central Bank.

“Some are calling for a quick and sharp increase in interest rates of 0.5 per cent already in July so that there would no longer be negative rates, while others are advocating a slower and milder increase. We will have to wait for the middle of the year,” Adrovic said.

He said that interest rates would most likely go up, adding that statistically 39 per cent of all loans were agreed at a floating interest rate and 61 per cent at a fixed interest rate. “This means that nothing will happen to those with the fixed interest rate, while in the case of those with the floating interest rate, the changeable part of the interest rate will change, while the margin will remain fixed.”

“We don’t expect an extremely high increase, but one that most people can bear. We advise citizens to check their annuities and talk to their bank about the possibility of fixing the interest rate for a future period of three or five years if they want to avoid this risk,” Adrovic said.

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