Savings in Serbia continue to grow despite the global economic crisis and the uncertainty caused by the coronavirus, which unequivocally indicates the continued confidence of the population in the stability of the domestic financial system, say the National Bank of Serbia.
Dinar savings reached a record 708.3 million euros at the end of June 2020, and in the last eight years, since June 2012, it has almost quadrupled, ie increased by as much as 565.3 million euros, the NBS announced.
More than half of the total growth, or 285 million euros, has been achieved in the last three years, the central bank points out. They add that this confirms that monetary, financial, fiscal and macroeconomic stability, which were achieved in the previous period and which are successfully maintained – were a precondition for citizens’ trust in the domestic currency and the banking system.
Foreign currency savings have also been growing in the past eight years, although somewhat more moderate than dinar savings. It increased from 7.9 billion euros at the end of June 2012 to 11 billion euros at the end of June this year.
According to the NBS, the continuous growth of dinar and foreign currency savings is realized in the conditions of lower interest rates on time savings of the population and, in the last four months, in the conditions of the crisis caused by coronavirus, which additionally confirms that citizens’ trust in the Serbian banking system is at high level.
Security in a pandemic
The central bank also reminds of all timely measures taken during the pandemic, which contributed to the safety of citizens and the preservation of economic activity.
The National Bank of Serbia says that, as before, in cooperation with the Government, it will strive to contribute to the dinarization process with its measures, activities and communication with the public in the future, with a special emphasis on dinar savings.
The latest analysis of the NBS once again confirmed that savings in domestic currency are more profitable than those in foreign currency.
The analysis of the profitability of savings term deposits for one year and re-term deposits in a period of eight years showed that a dinar saver on a deposit of 833 euros, at the end of the term period in June 2020 would receive almost about 340 euros more than in the same period deposited in foreign currency savings of the euro in the equivalent of the stated amount of 833 euros.
Even in the case of term savings for a year without renewal, in the last eight years it was more profitable to save in dinars, in as many as 98 percent of the observed annual subperiods.
For example, a saver who has been saving in dinars since last June, on a deposit of 833 euros, would receive over 20 euros more in June 2020 than the one who would deposit euros in the equivalent of 833 euros in the same period.
The same conclusion is reached when the profitability of dinar savings in relation to foreign currency is observed in shorter terms, but also in longer ones.
In the case of three-month savings, dinar savings were more profitable than in euros in more than 86 percent of the observed three-month subperiods, while in the two-year term, dinar savings were more profitable than euro savings in all observed two-year term subperiods.
The NBS emphasizes that the higher profitability of dinar savings is the result of achieved and maintained monetary stability, low and stable inflation and a relatively stable exchange rate of the dinar against the euro and the stability of the macroeconomic system.
Profitability is also reflected in higher interest rates on dinar savings compared to foreign currency, as well as in more favorable tax treatment of savings in domestic currency because interest on dinar savings is not taxed, while interest on foreign currency savings is paid in euros, Dnevnik reports.
