Interest Rates Still Rising

by A. Milutinovic

A hunch about the increase of hyperinflation can be got from interest rates' fluctuations on the money and short-term securities market in Belgrade. A significant rise in interest rates has been registered on that market lately

Namely, the average interest rate was 103% in January, while the inflation rate was around 26%. In February, after prices increased by 43%, the interest rates rose to around 120%, i.e. by 16-17%. In March, they already exceeded the mark of 150%, and will surely not fall below this level. Therefore, it can be concluded that the inflation in the following months will not be lower than it was in February.

Interest Rate Fluctuations

Date Supply (in millions of dinars) Demand (in millions of dinars) Annual interest rate Monthly interest rate

January 21,087 20,866 103.12% 6.18%

February 22,255 24,025 120.07% 6.45%

March 2 1,323 2,973 129.68% 7.30%

March 9 1,530 1,870 147.93% 7.98%

March 23 1,735 1,789 152.18% 8.15%

Source: "Berza" (The Money Market Bulletin)