The gradual increase in the interest rates on bank loans in our country is already being noticed by the borrowers, analyzes BNT.
Among the reasons is the tightening of key interest rates by central banks, in their fight against high prices. However, inflation is slowing down more and more. Analysts in Europe and the United States are already commenting on whether it is time for the Federal Reserve and the European Central Bank to lower key interest rates. What does this mean for borrowers in our country and what are the risks to the economy if central bankers slow down?
At its last meeting, the European Central Bank kept its key interest rate unchanged, but sent a clear signal that it is ready to begin a cut, as inflation in the eurozone moves closer to its 2% target.
"If confidence is further increased that inflation is approaching the target in a sustainable manner, it would be appropriate to reduce the current level of monetary policy constraint," said Christine Lagarde, President of the European Central Bank.
The European Central Bank started raising its key interest rate 2 years ago. At the moment, it remains unchanged - 4.5%. The interest rate is a record for the last 22 years. The ECB warns that price pressures remain high, giving them reason to continue cooling the economy. But isn't it time for a downgrade?
"Rather, they were immediately late, there are all the signs of an incipient recession in most European economies. Things are not looking rosy in the US either. But this delay is explained by the fact that inflation is still high", explained Prof. Emil Hersev, financier.
However, will a decrease in the main interest rate also be felt by the borrowers in our country.
"In the short and medium term, we cannot expect a change in mortgage interest rates. The decisions of the ECB directly affect us as well, but our specific situation is such that, as you said, the banks have very high liquidity and the reason is purely financial-behavioral. Household deposits alone are close to BGN 80 billion. Banks with a lot of liquidity, we know from the law of supply and demand, when there is a lot of one commodity, in our case - money, its price, i.e. the interest rate on the loan is low", pointed out Stoyan Georgiev, financial consultant.
"There is such a saying known from the City of London - buy the rumours, sell the facts. What is to come is already reflected. For this reason, when the measure comes, we will hardly feel it, since it has already begun to take effect", said Prof. Emil Hersev, financier.
We will find out whether the ECB will lower interest rates on June 6 at the earliest. The Eurozone Bank forecasts inflation to reach 2% next year.