Serbia, Lowering of interest rates to 5 - 6% on annual basis?

Minister of Finance Mlađan Dinkić announced that interest rates in 2005 should drop to 5-6% on annual basis.

- At the moment, the interest rates on three-month and six-month bonds amount to 20 - 21 % on annual basis. That is high and we consider it necessary to reduce them to 5 - 6%. That will be achieved through emission of one-year bonds in May or June 2005, after the adoption of the Law on Public Debt. The fact is that there is big demand for bonds of the Ministry of Finance of Serbia abroad. About €300m is registered demand of foreign big world investment companies, and since the demand is bigger than supply, we will offer only €50m and start to reduce interest rates gradually in the second half of the year until they reach amount of 5 - 6% - says Dinkić.