01.02.2023

BNB RAISED THE MAIN INTEREST RATE AGAIN

The Bulgarian National Bank raises the main interest rate again. Thus, from February 1, 2023, it will be 1.82 percent. This is the fifth in a row, an increase in the main interest rate. From January 1, it was increased to 1.42%, and from December 1 to 1.30%. In October it was set at 0.49% and in November it rose to 0.59%.

The main interest rate was last different from 0.00 on January 1, 2016, when it was 0.01%.

The value of the main interest rate matters, but only in some limited cases. Mainly the main interest rate is used to calculate the penalty or statutory interest on late payment. The calculation is done by adding 10% to the main interest rate.

The main interest rate is an instrument by which the value of a monetary unit in a country's economy is regulated and measured. Its amount is determined by the Central Bank.

When the main interest rate rises, it usually happens in a strong economy in order to balance it out. Inflation is also regulated in this way.

The Central bank reduces its size when the economy is in difficulty and there is a need to support it. This is done in order to stimulate the withdrawal of loans and provide new jobs.