The Governor of the Bulgarian National Bank Ivan Iskrov told reporters that he does not expect drastic changes in credit interest rates, and expects them to keep steadily rising.

Iskrov was hosting the government's European Affairs Committee on Tuesday, BTA reports.

Iskrov said that the interest rate rises are linked to the policy of the European Central Bank and of the USA's Federal Reserve. If these two institutions continue to raise interest rates, then the Bulgarian market would immediately react in the same direction and to the same amount, Iskrov said.

The raising of interest rates is not directly influenced by the higher inflation in the country, Iskrov reminded listeners, explaining that higher interests can indirectly influence the stabilization of inflation.

Iskrov believes that it is normal to expect interest rises since on a world scale there is a reevaluation of the risks and of the price of the resource with which Bulgarian banks and foreign non-banking investors take to invest the world over.

Bulgaria's interest levels are lower than that of other countries in the region, and its main interest percentage is a little over 5 per cent - the lowest in the so-called "New Europe": in Hungary it is 9.5 per cent and in Romania it is 10.5 per cent, he said; Bulgaria's low percentage is owed to the country's close integration with the EU's financial system.

Iskrov said that he does not believe that Bulgaria's banks will become real estate firms. He supported this statement by saying that in Bulgaria he did not know of a case where low-quality mortgage credits had been given. He said that mortgages in the USA have nothing in common with those in Bulgaria: in Europe, there is "classical banking", where credit is given to a particular person or company, while in the USA much of the creditors possess securities endorsed by credit agencies. Much of the Bulgarian market is also centered on owners or buyers, as opposed to being speculation-based market.

He said that he has prepared a working group with the participation of experts from the cetral bank, the Economy Ministry and the Consumer Protection Committee, for the harmonization of the new EU directive on consumer credit with a national law. A new EU-compliant law is also being prepared for payments, he said.

Photo: Profit.bg