Bad news for all people with accounts at Raiffeisen Bank

The Raiffeisen Bank has already announced to its consumers that since this month it will implement the new decision to raise interest rates in new loans.

But it is taught that increasing bank interest from the BQK will not only apply to new loans, but also to existing loans, which will affect all families who have already taken loans to any of the commercial banks in Kosovo.

This bank, today through a message, has announced its clients “accelerates” that the interest rate for the so-called “as financed with Lizing” will change, and that starting from the September month's tranche.

“This change is due to an increase in the rate at EURIBOR on the European market. The next few days you will accept the new amortisation plan with the revised changes”, said the RBKO report to its banking clients.

The Economic Bulletin days ago has compared the average interest rate in loans in Kosovo for July, which was 6.1 per cent, compared to May, when the rate was 5.9 per cent.

The increase has been especially noted in the rate of interest in consumer loans that had risen to 6.3 percent, up from 6.2 percent in May.

Otherwise, Kosovo Central Bank's warning of increasing interest rates in the banking sector was made by relying on recent European Central Bank decisions (BQE) for increasing credit interest rates, with the goals of coping with high inflation.

“... liquidity-holding costs will be challenged by increasing global interest rates, which are broadcast directly through financing from mother banks. The monetary policies of some central banks have only countered increasing inflation through increasing basic interest rates. The ECB has been reluctant to intervene and change monetary policy in the first half of 2022, largely as a consequence of the impact expected to have an increase in the cost of financing in some of the EU's (potential recession) economies and further weakening of the euro”, says the BQ's “Financial Stability report”.

The central bank further in this report has said that the pandemic crisis initially increased the uncertainty of acts in the financial system for possible pressure to manage liquidity. However, according to the CEC, increasing the preferences of savings for spending, but also of reduced opportunities and insecurities to spend in times of crisis, contributed to the balance of bank financing in favor of the position of liquidity, which was inherited in 2021.

“However, the Persian increase in inflation at unprecedented levels in the last decade has influenced the ECB to signal the potential decision to raise interest rates in the council's collection in July 2022. Changes in interest rates in the ECB will indirectly affect the costs of keeping liquidity and funding costs in the country. Moreover, despite the high levels of liquidity at the sector level, the majority of banks have noted a decline in the liquidity report from last year, among which some with a more emphasisable drop”.

The BEC has also indicated that deposits will also mark reductions compared to last year.

“Proceeds for 2022 and further provide indicators for new increased challenges in the context of funding costs. Initially, the increase in deposits is not expected to have growth trends as in 2021, and this will promote the competitiveness of banks in attracting and maintaining deposits, affecting the increase in funding costs”.

The European Central Bank, for the first time in 11 years, has decided to raise interest rates in an effort to control inflation growth in the Eurozone.

As this institution has announced on July 21st, key interest rates have currently increased by 0.5 percent to 0.0 percent, while further growth is planned during the year.

According to the European Central Bank, when prices in the economy rise rapidly - that is, when inflation is too high - interest rates help restore inflation to the target of 2 percent over the medium term. /Economic Butletine/