That has never happened in our country, and dinar loans for the economy are most responsible for that.
Interest rates on dinar and foreign currency loans to the economy are equal, and something like that has probably never happened in our country. Dinar loans for the economy from the guarantee scheme are most responsible for that. Dinar loans to the economy were approved in August with 2.9 percent interest, and those in the euro sign with three percent.
The National Bank of Serbia (NBS) says that the trend of approaching interest rates on dinar loans with interest rates on Euro-indexed loans has been present for a long time.
– Interest rates on dinar loans have been reduced mostly thanks to the easing of the NBS monetary policy, but also to the overall macroeconomic stability in our country, primarily low and stable inflation, which averaged about two percent over the past seven years. In particular, since May 2013, when the monetary easing cycle began, the reference interest rate has been reduced by 10.5 percentage points, from 11.75 percent in May 2013 to 1.25 percent, which is its lowest level in the inflation targeting regime. That was more than fully transferred to the interest rates on loans to the economy and households, which are lower by 13 percentage points today than in May 2013 – they say in the central bank.
They add that with their measures and during the pandemic, they undertook activities in order to make financing the economy more accessible and cheaper. The focus of the measures was on providing loans to the economy in dinars, which, among other things, enabled us to bring the degree of dinarization of the financial system closer to the level of 40 percent.
One of the activities that influenced the convergence of interest rates on dinar and Euro-indexed loans to the economy is the approval of loans from the guarantee scheme on more favorable terms, among other things thanks to the NBS decision to pay banks a “preferential” rate on required reserves in dinars – the so-called remuneration rate (higher by 0.5 percentage points compared to the regular one.
The trend of equalization of interest rates on dinar and euro-indexed loans is present primarily with interest rates on corporate loans. Observed since the beginning of the year, the difference between the weighted average interest rates on dinar and euro-indexed loans to the economy averaged 0.6 percentage points. In July, that difference decreased to 0.45 percentage points, while in August, even dinar loans to the economy were approved at a lower rate compared to Euro-indexed loans. The weighted average interest rate at which dinar loans were approved to the economy in August was 2.9 percent, and for the first time it was lower than the average weighted interest rate on Euro-indexed loans to the economy, which was three percent in August.
If we look at the categories within the loans to the economy in dinars, working capital loans in August and other uncategorized loans were approved at an average rate of 2.9 percent, while investment loans were approved at a rate of 3.6 percent. At the same time, euro-indexed loans in euros for working capital were approved at an average rate of 2.4 percent, investment at a rate of 3.8 percent, and other uncategorized loans at the same rate as dinar loans, 2.9 percent, Politika reports.
