NBS decreases compulsory foreign exchange reserve for banks - As of February 2016, 6% lower interest rate

The Executive Board of the National bank of Serbia, at today’s meeting, adopted the Decision on amendment of the Decision on compulsory reserve of bank at the National Bank of Serbia.

The Executive Board decided to decrease rates of foreign currency compulsory reserve for one percentage in the next six calculation periods. This means that as of February 18, 2016 rates of foreign currency compulsory reserve for maturity of up to two years, instead of current 26%, total 20%, and for longer maturity 13%, instead of 19%.

Rates for dinar compulsory reserves remained unchanged so banks have still been motivated to use dinar funding sources.

With the adopted changes, the National Bank of Serbia additionally freed a part of credit potential of banks and it is expected that banks increase credit activity and lower interest rates for loans they approve to clients. This way, the process of convergence in line with the rates of compulsory reserves in neighboring countries has been continued i.e. in line with rates in Euro zone.