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Serbia, Should the government issue savings bonds?

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Croatia announced that on Wednesday it will start issuing savings bonds with a total value of one billion euros, with an interest rate of at least three percent per year. 

The goal is for customers to be citizens interested in investing their savings at a relatively favorable interest rate. Serbia, on the other hand, last issued savings bonds in 2017 – and managed to sell less than a quarter of the issue with a total value of 80 million euros. interlocutors agree that the state should try to mobilize the money of our depositors, who currently keep 13.7 billion euros and 96.3 billion dinars in banks alone.

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Milan Marinković, a partner in WM Equity Partners, recently described for what an ” ideal savings product ” could look like, which is missing from the domestic market.

“It would be a state bond denominated in dinars, with an interest rate that is three to four percentage points higher than the expected inflation rate, and available at the click of a button,” said Marinković, emphasizing the fact that the bonds are exempt from taxes, while on the savings side in banks, the important thing is that it can be arranged online.

The chief broker of the brokerage company Momentum Securities, Nenad Gujaničić, in the author’s text “Is there a honeymoon for savers in Serbia”, just pointed out the “hole” in the domestic capital market, which could be filled by a savings bond.

While government bonds denominated in euros due in 2027 can be purchased with a yield of more than six percent, depositors in banks for this period can receive an effective interest rate of a maximum of three percent. 

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Any other market would very quickly lead to price arbitrage and convergence of these returns, but here it is not the case, or at least it will not be in the near future. 

First of all, due to the low level of education of the depositors, but also the conception of the state, which, in collecting capital, is much simpler to correspond with a few international investment banks than to animate its own citizens”, Gujaničić assessed in the author’s text. draws attention to the fact that at the end of 2017, when the state of the currency deposit market was unfavorable for savers, the state issued savings bonds denominated in dinars and euros.

Savings bonds denominated in euros were offered in the amount of 80 million euros, and only 17.5 million euros were realized. Dinar bonds were offered in the value of 12 billion dinars, and were sold for 195.7 million dinars. 

“Unfortunately, the yields on bonds were not significantly more attractive, which, along with the poor awareness of the average saver, contributed to the poor response of investors,” says Gujaničić for

According to him, the buyers of dinar-denominated savings bonds fared best with this bond issue, given that in the following period the dinar strengthened against the euro, so the real yield was significantly above these rates.

“Euro-denominated savings bonds also yielded a better return than would otherwise have been the case in the market.” The exception is 10-year bonds, which in these circumstances are quoted worse considering the growth of yields in the last half year,” concluded Gujaničić.

Zoran Grubišić, a professor at the Belgrade Banking Academy, believes that the current situation is such that the state could “test the market” and offer citizens savings bonds.

“It is about slightly more than 14 billion euros of savings that are ‘spinning’ in the banking sector. I think it is a good idea to mobilize that money, especially since the country knows that it can borrow on the international market, where we, like other countries, currently borrow at a higher price than before, but we maintain the credit rating and the price of the debt, which is for three or four percentage points higher than the debt of the USA or Germany, which have a prime rating”, explains Grubišić for

The question, however, is whether the state would thus become a strong competitor to domestic banks, whose interest rates on savings have increased, but not so much that they could be called very attractive.

“Perhaps the offer of government savings bonds would stimulate banks to additionally raise interest rates on citizens’ deposits.” Competition cannot be bad news,” Grubišić told

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