Interest rates in Bulgaria uninfluenced by EU accession

Sofia Echo.com, 29th May 2006

Bulgaria's EU accession will have no direct influence over the loan interest rates.
Banker newspaper quoted Bulbank executive director Levon Hampartzoumian as saying that the entry was only a political act and its economic consequences were already present. The interest rates were influenced only by the conditions on the Bulgarian and international markets, Banker said.
A decrease of credit interest rates in Bulgaria is unlikely, Banker said. After entering the euro zone, they will depend on the European Central Bank's interest rate, which is expected to rise over the next few years.

Another factor hindering the decrease of credit interests is the significant administrative expenses of the Bulgarian banks to fulfill EU requirements and impose new capital adequacy standards.
Interest rates are influenced by the country's international rating and the risk evaluation. The expected EU accession in 2007 and the acceptance of the euro would further increase the trust in the country, Banker said.

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