Montenegro is on the brink of financial disaster, and guess who’s to blame? The US dollar! Economist Miloš Vuković reveals that the country is facing a whopping 45 million euro loss due to hedging deals that were supposed to protect the budget. How did this happen? Last year, Montenegro took out a loan in US dollars, with hedging contracts locked in at an EUR/USD rate of 1.10. Now, the dollar has weakened by about 7%, dropping the rate to 1.02, meaning Montenegro has to pay more euros for the same amount of dollars! But wait, there’s more – these contracts are confidential, so no one knows if they can be terminated early. Plus, the extension of the deal with China’s Exim Bank bumped the interest rate from 0.98% to 1.46%, a nearly 50% increase! Montenegro’s budget, already on the edge of sustainability, is now under even more strain. Vuković warns that the public was misled with stories of profits from hedging, while the real risks and losses were swept under the rug. This is a textbook case of how poor financial management and lack of transparency can push a country to the brink of bankruptcy. Think this is the end? Think again – this is just the beginning of the financial chaos looming if nothing changes. So, what do you think? Is anyone in Montenegro actually responsible for these disastrous decisions? Drop a comment and let’s see who’s brave enough to face this financial mess!
