While representatives of the Ministry of Finance are talking with the seven world banks about hedging and protection from currency risk of the loan for the highway, both government and opposition representatives say that there’s no other choice. The only thing that must be taken into account now is that this complicated arrangement is negotiated at the lowest price possible.
Hedging has several types: credit, currency…In our case the currency hedging means that dollar loan we took out from the Exim bank should be partially or wholly converted into EUR credit. How much will this cost the Government? At this moment, they couldn’t tell.
Finance Minister, Mr Darko Radunović, said in the interview for Pobjeda that negotiations were underway with seven banks.
Ministry representatives said that agreements were expected to be harmonized by the end of March.
Since huge amounts of loan are in question, such transactions require special caution and a lot of knowledge.
The trends over the last year wasn’t favorable for the dollar-Euro conversion, but considering the huge amounts and the repayment, it is impossible to foresee the currency trends, and that’s why hedging is needed.
President of the Committee for Economy, Mr Predrag Sekulić, said that it was impossible to foresee euro-dollar ratio in the forthcoming years.
“Government’s decision to protect itself from the currency risk is to be complemented”, Mr Sekulić says.
Once the loan for the priority highway section is fully paid, the line will be drawn.
“Then we’ll be able to tell if hedging brought as profit”, Mr Sekulić says.
Mr Aleksandar Damjanović, president of the Committee, said that hedging had to be done.
“It would have been much more favorable if the loan had been taken in EUR. But it’s another subject now. Now we must focus on the best conditions for this complex arrangement”, Mr Damjanović says.
He expects a transparent process of negotiations and choice of financial institution.
Mr Damjnaovič points out that the price for the hedging is the key factor. He holds that we really needed protection.
“Otherwise, we would be left out to global EUR-Dollar ration which Montenegro doesn’t have an impact on”, says Mr Damjanović.
