Spajić: Great news for Montenegro, successful hedging yields savings of 4 million already in January

We have great news from the Ministry of Finance. We have just completed a hedging transaction, and our installment due on 21 January will be 4 million lower than it was supposed to be. This saving will undoubtedly benefit the citizens of Montenegro and will be a significant help this year, stated Prime Minister Spajić.

He explained that hedging is a financial instrument that helped reduce the interest rate from 2% to 0.98%.

As he pointed out, this opportunity was missed in July of last year during the term of the 43rd Government when there was a chance to extend the previous arrangement concluded during his tenure as the Minister of Finance and Social Welfare.

Montenegro has successfully negotiated a hedging arrangement, once again securing the country's debt against currency risk. The entire amount of the credit arrangement for the Bar-Boljare motorway is safeguarded until the complete repayment of the debt to the Chinese EXIM Bank, until the year 2035, with the possibility of redefining the terms after 2 years.

The new hedging agreement was made with 4 banks (European and American) that offered the most favorable conditions.

The entire process was conducted in accordance with the Law on the Budget of Montenegro for the year 2024, with the approval of the Government and in line with the international ISDA standards (International Swaps and Derivatives Association).

This is a significant success for the country of Montenegro with a credit rating of B/B1, confirming active and responsible management of public debt.

Thus, another promise of the 44th Government has been fulfilled.