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Croatian Banking Association expects rates to stay low in short term

Croatian Banking Association expects rates to stay low in short term Ivan Smuk/Shutterstock.com

ZAGREB (Croatia), September 11 (SeeNews) – Croatia's interest rates will remain low in the short term, given the continuation of the ultra-easy monetary policy of the European Central Bank (ECB), the Croatian Banking Association has said.

There will be no upward pressure on interest rates in the country from abroad and their movements will depend primarily on the price of financing and deposits in Croatia, the association said in a statement on Friday, commenting on ECB's plans to postpone the tapering decision on its quantitative easing (QE) policy to October.

In the case of loans to households with a variable part linked to EURIBOR, interest rates should not increase in the foreseeable future, while for loans with a variable national interest rate parameter, they tend to fall further, the association said.

This period of low interest rates represents a chance for cheaper financing to the public sector in Croatia, it added.

The ECB said last week it decided to keep the interest rate on the main refinancing operations at 0.00% and said it expects the rate to remain at its present level for an extended period of time, and well past the horizon of the net asset purchases.

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