WILL BOSNIAN BANKS RAISE INTREST RATES?

SARAJEVO, Bosnia (February 12,2008) - In the face of interest rates revisions by banks in the region, the issue is increasingly being raised whether the trend would expand to Bosnia as well. The Bosnian banks have around 10 billion Bosnian Marks in loans.

The Governer of the Bosnian Central Bank Kemal Kozaric points out that interest rates in Bosnia are lower then in the neighbouring countries – by the end of 2007, the average interest rate was 7.05 per cent on short-term loans and 8.25 per cent on the long-term ones.

Governer Kozaric’s estimate is that, given the global financial trends and dependence on interest rates in the EU, further decreases are not likely to happen.

As far the inflation in Bosnia is concerned, it is still considerably below the inflation seen by the other Southeastern European countries, which is why Kozaric does not see a reason to increase the rates, either.