European Central Bank interest rate hike impacts borrowers in Greece and Bosnia

The European Central Bank (ECB) has implemented a 0.25% increase in key interest rates to combat inflation driven by rising energy costs. This decision carries significant implications for borrowers and depositors across Europe and neighboring regions.

In Greece, the rate hike affects those with variable-rate loans, while deposit rates are expected to rise gradually, though Greek banks have not yet matched the yields seen in other European groups. As of mid-September, the ECB deposit rate stands at 2.50%, the main refinancing rate at 2.65%, and the marginal lending rate at 2.90%.

In Bosnia and Herzegovina, although not an EU member under direct ECB jurisdiction, the decision is expected to have indirect consequences. The rise in EURIBOR, which serves as a reference rate for many local loans, may lead to higher monthly installments for citizens with variable-rate contracts and increased costs for new credit applications.