Weekly Briefing, Vol. 59. No. 2 (ME) February 2023
Trends in monetary sector: interest rate growth
Abstract
Instability in the global market was also reflected in the monetary sector. During the previous period, an increase in active interest rates was recorded, along with a simultaneous increase in loans and deposits. In January 2023, active interest rates increased by 0.4 percentage points in comparison to January 2022. On the other hand, the passive interest rate decreased in the observed period, with an increase in the interest rate on time deposits, especially deposits with a longer maturity. Unlike time deposits, which recorded a decline during the previous period, demand deposits recorded growth, which can be explained by uncertainty regarding future trends and the desire of households and companies to have readily available funds.
Introduction
Uncertainty on the international market, which was caused by the war in Ukraine, was reflected in the rise in prices. A high rate of inflation was also recorded in Montenegro, given its import dependence and strong economic connection with other countries. One of the measures taken by the states in order to curb inflation is the increase in interest rates.