“If interest rates rise, that will be minimal.”

“If interest rates rise, it will be minimal”

Raising interest rates should not be expected before the next quarter, because the situation will be monitored until then, and even if that happens, raising interest rates will be very mild, according to Belgrade Banking Academy professor Zoran Grubisic.

In an interview with the BIZLife portal, Professor Grubišić, among other things, says that it may happen that inflation calms down on its own and that there will be no need to “cool the market” with that measure, but that spring remains to be seen. that is, the second quarter of the year to make the situation clearer.

  • The NBS announced that inflation will be higher than the target and that it will last until the middle of this year. Should we be worried and can it still be said that it is temporary and what determines whether it will return to the target framework and when?

The situation in this quarter will be monitored, April will be waited for, and we will see how much the year-on-year inflation is, as a kind of passing time, so steps will be taken in time – for now, the situation is only being monitored.

  • It is expected that the US Federal Reserve (FED) will start raising the reference interest rate from the spring of 2022 in response to rising inflation, and it is projected that as many as three rate increases are expected in 2022. increase and how much?

I think that these inflation expectations exist as a consequence of the movement of global asset prices on the world market. These are oil, primarily energy fuels, and seasonal prices of agricultural products. The question is, the Central Banks estimate for now, no one has “pulled a leg” yet, it was said that the Fed will be the first, and there are announcements already, and the others are following.

As far as we are concerned, the NBS has an official position that interest rates will not be raised for now until April, that we will wait for this quarter to pass, to see if inflation will calm down by itself so that it is not necessary to cool the market.

It is expected to see how the markets will react, even if it does not calm down and if the inflation trends turn out to be more permanent, I expect central banks to start reacting between the second and third quarters, ie to cool the markets by raising interest rates slightly. steps.

  • What will happen to loans, how could that affect loans?

This should not create panic and be discouraging for loan users, because raising rates will be slight this year, maybe by 0.25 or 0.5 percentage points, and it will not affect reference interest rates as much. It could happen to jump by one percent Euribor, which means that it was not a very dramatic jump in the installment, for example, for a housing loan.

  • Almost as if on a conveyor belt, the takeover of banks is taking place in Serbia, what is the future of the banking sector, is there a further enlargement of banks? What does it bring, what are the advantages and what are the possible disadvantages? Do you expect that banks will continue to reduce the number of branches and employees in them due to the application of digital technologies?

It seems that the profitability in the banking sector and the yields that interest the owners are not at the level they were and can only survive and be competitive with big players. It is an oligopolistic market in which you have five, six banks that hold 80 percent of the market, I think that smaller players cannot be competitive, that is, they cannot match the big players and be competitive.

We still have a large number of banks according to the number of users and the size of the market and I expect this trend to continue, not so fast, maybe this year or next year one or two more banks will leave the market and this is a trend we can expect – further concentration , enlargement.

As for digitalization, digital economy and finance, e-banking, I expect that it will have the effect of slightly reducing the number of employees as a consequence of all that, because it is due to the transition to digital banking and enlargement. There will be nothing dramatic, but there will be more and more digital options.

  • Can we talk about the fact that “fintek” is taking over, and is it a threat to banks, what is your impression, whom do clients trust more?

It is indisputable that the competition will force banks to be even more customer-oriented, which is good because it forces all and existing players to offer a wider range and better services.

  • The area of ​​digital property has recently been recognized in Serbian legislation, which was most expected by those who trade cryptocurrencies, of which there are more and more in Serbia. Although this has not been banned so far, cryptocurrencies are not legal tender. What does the law practically bring, what is changing and how do you see the future of that branch in Serbia in the coming period?

I think that the regulations will still change, and adapt to the needs of the market, the essence is to make transactions as visible as possible and to be subject to monitoring from the angle of the central bank, tax authorities. That is the essence. That is a number of users who are focused on that market and see some advantages there. Most are aware of the risks that exist.

  • This year, Serbia returned all the reserves of gold stored abroad to the country, but it also decided to buy additional quantities. What does that mean, why does it seem, is it maybe in some way, a kind of security in case of major disturbances and pressures, or global instabilities?

These are two topics. One is the increase in the share of gold in foreign exchange reserves, and all central banks are doing that. It is not necessary to withdraw to Serbia, it is enough that you have invested, it does not matter where the gold is, it is more important what the structure of foreign exchange reserves is, ie where it is invested and how much gold participates.

Our foreign exchange reserves are growing and have reached a record 14 billion net, that is good news, and where it is kept and whether it is withdrawn, it is a risk assessment, in terms of whether to keep it in the country, sometimes it is populism to say gold bars are in Serbia. That is how the President of Venezuela, Hugo Chavez, once said: that the people know that our foreign exchange reserves are there… That is less important, it is more important that the share of gold increases, that is what the big central banks are doing.

Source: BIZLife / Jelena Andrić

Photo: Printscreen

Source: BIZlife by bizlife.rs.

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