The Central Bank of Bosnia and Herzegovina (CBBH) has adopted Decision on Amendment of Decision on Determining and Maintaining Required Reserves and Determining Compensation on the Reserve Amount.
According to this Decision, the compensation on funds exceeding the required reserve is decreased from -0.75% to -0.25%. Also, according to this Decision, the compensation on required reserve funds based on foreign currency base and the base in the local currency with currency indexation is decreased from the current level of -0.60% to -0.10%. Compensation is not charged on required reserve funds based on the local currency, BAM, base.
The decision on decreasing the compensation on funds exceeding required reserve held by banks in accounts with the CBBH has been adopted with purpose of harmonisation with the benchmark interest rate of the European Central Bank (ECB) and mitigation of the effect of the ECB benchmark interest rate increase on the operations of banks in BH. The CBBH will continue to follow up and harmonize its compensation policies depending on the trends in international financial markets and their effect on financial sector of Bosnia and Herzegovina.
The primary objective of the Decision on the compensation charged by the CBBH on required reserve based on foreign currency base and base in the local currency with currency indexation is promoting the use of sources of financing in the local currency. The attitude of the CBBH has not been changed on that issue, and the decrease of the compensation charged reflects the harmonisation of the CBBH policy with the ECB policy.
