July 22 (SeeNews) - Dinar-denominated deposits in Serbian banks reached a record-high value in June, exceeding 70 billion dinars ($667.4 million/ 594.7 million euro) for the first time, the central bank, NBS, said on Monday.
The value of dinar-denominated deposits has increased by 40% since the beginning of 2018 and keeps growing, while compared to June 2013 it is three times as high, the central bank said in a statement.
The increase in dinar-denominated deposits was backed by constant growth in their profitabilit, due to low and stable inflation, a fairly stable exchange rate of the dinar against the euro, as well as higher interest rates on savings in domestic currency compared to savings in euro, NBS said.
Moreover, the tax exemption of interest earned from dinar savings also contributed positively.
The share of dinar-denominated loans extended by Serbian banks in the first quarter of 2019 fell to 35.6% of total loans, from 37.7% in the like period of last year. The Serbian banks extended local currency-denominated loans worth 327.4 billion dinars in January-March, 34 billion dinars more compared to the firat quarter of 2018, the central bank said last month.
In 2012, the Serbian government and NBS adopted a strategy for "dinarisation" of the country's economy that aims to achieve a satisfactory level of the use of the dinar in the financial system, in order to improve financial stability, lessen the risk of exchange rate volatility and increase the effectiveness of monetary policy.