Credit indebtedness of the citizens of Bosnia and Herzegovina with commercial banks has been growing moderately lately, with non-purpose consumer loans rising the most, it was stated from the Central Bank of BiH for Fena, adding that the growth of interest rates on the domestic market will determine the decisions of the European Central Bank (ECB).
The credit indebtedness of households with commercial banks in March 2022 amounted to 10.5 billion marks, while at the end of 2021 it amounted to 10.4 billion marks, is confirmed from the Central Bank of BiH.
They state that the credit indebtedness of BH citizens is growing moderately so that the annual growth in March was 5.5 percent.
At the beginning of the year, they added, there was a short-term decrease in loans, but after that they started to grow again, while in the whole of 2021 there was an increase in contrast to the recession in 2020, when there was no significant credit growth.
High inflation rate
High inflation also affected the growth of interest rates, so some key central banks resorted to raising interest rates in the fight against rising inflation.
Thus, in March 2022, the Fed raised interest rates by 25 basis points, followed by a second increase in interest rates by 50 basis points in early May, and interest rates in the range of 0.75-1 percent.
Also, on 5 May 2022, the Bank of England raised the reference interest rate by 25 basis points and it is currently 1 per cent, the highest level in 13 years.
The Central Bank of BiH notes that the European Central Bank has kept the reference interest rates unchanged, although it is preparing for a series of gradual increases in interest rates that will bring the reference interest rate into positive territory.
“In our banks, interest rates on loans are mostly linked to EURIBOR, the interest rate on the European money market, and the ECB’s decisions will certainly determine the movement of interest rates on the domestic market to some extent,” say the Central Bank.
High inflation rates, they say, are recorded globally and could be maintained in 2022, given the structural disruptions in the energy market caused by the outbreak of war in Ukraine, the new Chinese lockdown and its impact on global supply chains, as well as the fact that companies increase wages because they face a shortage of workers.
What is the savings of citizens in banks?
According to the latest available data from the Central Bank of BiH, at the end of March 2021, total household deposits amounted to 13.78 billion marks.
If the maturity structure of household deposits is observed, short-term and long-term deposits amount to 4.98 billion marks, while demand deposits and transaction accounts amount to 8.80 billion marks.
Central Register of Loans to Business Entities and Individuals
Asked how often the data in the Central Register of Loans of Business Entities and Individuals in BiH are updated, the Central Bank said that the bank updates the data immediately upon receipt, after which the updated data is available to data users.
“So, updating the data in the register is in real time, but after the Central Bank receives correctly submitted data from participants who submit data on debts of individuals and business entities,” emphasize the Central Bank of BiH.
