Governing Board of the Central Bank of BiH (CBBiH) made a decision on establishing and maintaining of required reserves and determination of the fee of CBBiH on the amount of reserves. Aforementioned decision will be applied from the 1st of July 2016.
With this decision, the base for calculation of required reserves are deposits and borrowed funds, regardless of the currency. The decision also established a unique reserve requirement rate of 10 % that the CBBiH applies to the base for calculation of required reserves. The current mandatory reserve amounted to 17 %.
“At the EU level, interest rates have significantly fallen, and according to the latest decisions of the Governing Board of the Central Bank of BiH, they will be further decreasing. There is less investment recently, which legal entities are paying to banks. Banks will, therefore, have to fight for clients, because of falling of interest rates,” said Fuad Kasumovic, economic expert and former Deputy Minister of Finance of BiH.
Kasumovic believes that it is the safest for the bank to approve a loan to the country. With the decision on the introduction of negative interest rate charges on surplus amounts above the required reserves on reserve accounts, the CBBiH wants to encourage commercial banks to take advantage of those funds for loans to citizens and companies.
“In this way, the government directly threatens the economy together with the bank. In my opinion, it is not good that the government borrows from commercial banks, since these kinds of actions bring certain losses,” added Kasumovic.
Surpluses above obligatory reserves of commercial banks on reserve accounts at the Central Bank are showing continual growth for a long time, and banks in the form of surplus hold about 2.5 billion BAM on reserve accounts.
“This is a good opportunity to focus these funds, if not in the real sector, then in the state capital projects such as road infrastructure and energy. Real sector indirectly makes certain benefit out of it,” concluded Duljko Hasic, economic analyst of Executive Director of the Executive Directorate for Business Development of BH Telecom.
(Source: A. B./Klix.ba)
