Montenegro has just paid the ninth installment of its loan for the Bar-Boljare highway to the Chinese Exim Bank — and guess what? Thanks to a clever hedging arrangement, the country saved a whopping 620,000 euros! Without this financial shield, Montenegro would have had to pay 33.8 million euros, but the actual payment was only 33.18 million euros. This smart move prevented the negative effects of currency fluctuations and has saved the state a total of 12.6 million euros so far.
So, how did this magic happen? The Ministry of Finance of Montenegro activated a hedging deal earlier this year that converted the debt from US dollars to euros under extremely favorable conditions — the average interest rate dropped from 2% to just 0.98%! And it gets better: starting January, a new, even lower fixed interest rate of 1.46% was set, further reducing borrowing costs.
This isn’t just numbers on paper — it’s financial predictability and stability in times of global economic uncertainty. The Ministry of Finance clearly stated that long-term fiscal sustainability and protecting the interests of Montenegrin citizens are top priorities.
Remember, the initial hedging deal was signed in 2019 and brought the budget benefits of around 64 million US dollars! This arrangement was initiated by the then Minister of Finance, now Prime Minister Milojko Spajić.
So, while many complain about public debt and expenses, Montenegro is showing how to wisely manage finances and shield the budget from unpredictable currency risks. If you’re tired of bad news, here’s one that proves smart and responsible management is possible even in our region!
Now, what do you think — is this just a lucky coincidence or a sign that things are actually getting better? Drop your thoughts, let’s see who’s for and who’s against this financial acrobatics!
