Central bank hikes key rate

Well I don't fancy Jelasic's chances of retaining his job in the event of a SRS victory.

Still, this interest rate rise looks like a preemptive measure in the event of a run on the dinar (SRS victory) as well as inflation.

However, the dinar is overvalued so it would not be a bad thing were it to fall in value.

bganon,

The dinar is not the sole currency overvalued in the area. The Hungarian forint is also terribly overvalued; the high interest rate keeps it artificially high (a lot of Western hot money get parked there to collect the high interest). I am wondering if other currencies like the kuna are overvalued too....most likely so.

Well I don't fancy Jelasic's chances of retaining his job in the event of a SRS victory.

Still, this interest rate rise looks like a preemptive measure in the event of a run on the dinar (SRS victory) as well as inflation.

However, the dinar is overvalued so it would not be a bad thing were it to fall in value.

bganon,

The dinar is not the sole currency overvalued in the area. The Hungarian forint is also terribly overvalued; the high interest rate keeps it artificially high (a lot of Western hot money get parked there to collect the high interest). I am wondering if other currencies like the kuna are overvalued too....most likely so.