For now, the Serbian banking market is far from negative interest rates on household deposits, and we should not expect such rates on savings deposits in banks in Serbia, says Vladimir Vasic, Secretary General of the Association of Serbian Banks.
According to him, the reasons for that lie primarily in the fact that the interest rates on Euro savings in the domestic market are significantly higher than in the eurozone countries and that the savings collected in this way are a cheaper way for banks to get additional sources to finance their lending activity borrow abroad.
“A strong additional argument is the fact that the National Bank of Serbia does not currently charge negative interest rates on the allocated foreign exchange reserves of banks, as well as that there are no indications that this will happen in the near future,” Vasic said in an interview with the latest issue of the Magazine The business.
When it comes to interest rates on savings, which are negative in most European countries, he points out that the European Central Bank holds a negative reference interest rate, which spilled over into the operations of banks on the international market.
He adds that only some banks have such a practice, and only for a certain type of savings – for example, for savings of more than one million euros.
When asked how much the increase in savings can be a limiting factor in the operations of banks and why, Vasic said that the funds collected through savings are a real source for banks for additional lending activity and support to the economy and citizens.
“Current interest rates on Euro savings in Serbia are still at a higher level than in the eurozone countries. The main reason for this is probably the country’s rating, which, although improved, is still below the investment grade, which entails higher costs of borrowing of domestic banks abroad, than is the case with banks operating in the eurozone,” says Vasic.
He adds that this directly reflects on interest rates on domestic savings in euros, RTV reports.
