REPORT ON DINARISATION OF THE SERBIAN FINANCIAL SYSTEM · increased in Q1 2017, reflecting a rise...

REPORT ON DINARISATION

OF THE SERBIAN FINANCIAL SYSTEM

March 2017

Belgrade, July 2017

Report on Dinarisation of the Serbian Financial System National Bank of Serbia

Introductory note

A more extensive use of the dinar in the financial system and better currency matching of income and

expenses of the non-bank sector will improve the country’s financial stability, lessen the risk of exchange

rate volatility in the most vulnerable sectors of the economy, and enhance the effectiveness of monetary

policy. To support the process of dinarisation, the National Bank of Serbia (NBS) and the Government of

the Republic of Serbia signed the Memorandum on the Strategy of Dinarisation of the Serbian Financial

System in April 2012.

Pursuant to the Memorandum, the NBS and the Government have committed to monitoring and analysing

the degree of dinarisation and to regularly informing the public about the use of the dinar in the domestic

financial system. For that purpose, the NBS prepares and publishes the quarterly Report on Dinarisation of

the Serbian Financial System as one of its supporting communication tools. The Report provides

information about developments in the dinar market and highlights measures and activities taken or planned

by market players and regulatory authorities with a view to supporting the process of dinarisation. Making

this information accessible to the wider public will help raise awareness of the need to hedge against risks

associated with changes in the exchange rate, as well as understanding of the measures and activities to be

taken by the NBS and the Government in order to encourage the process of dinarisation of the Serbian

financial system.

Reports on Dinarisation of the Serbian Financial System are available on the NBS website (www.nbs.rs).


Dinarisation strategy

The dinarisation strategy rests on three inter-connected pillars.

The first pillar is the most general, but also the most important one. It envisages measures to strengthen the

macroeconomic environment by delivering low and stable inflation, a stable financial system and sustainable

economic growth.

The second pillar consists of measures to promote dinar-denominated instruments and markets, with a special

emphasis on the development of the dinar bond market. The development of the dinar yield curve is an important

cornerstone of this pillar.

The third pillar aims to promote hedging against the risks associated with foreign exchange rate exposure in the

non-bank sector and to discourage further build-up of those risks. The National Bank of Serbia will lead the

efforts in this field, working together with the banking sector on introducing and developing basic hedging

instruments both for the interbank market and for clients.


ABBREVIATIONS

mln – million

bln – billion

pp – percentage point

Q – quarter

q-o-q – quarter-on-quarter

Other generally accepted abbreviations are not cited.


Contents

I. Dinarisation of the Serbian financial system ................................................................................................... 1

1. Corporate and household lending ................................................................................................................... 1 2. New corporate and household loans ............................................................................................................... 3 3. Corporate and household deposits ................................................................................................................. 5 4. Dinar and FX savings ...................................................................................................................................... 6 5. Public debt ...................................................................................................................................................... 7 II. FX hedging instruments .................................................................................................................................. 9

1. FX swap auctions ............................................................................................................................................ 9 2. FX hedging instruments .................................................................................................................................10

Methodological notes .....................................................................................................................................12

Index of charts and tables ..............................................................................................................................13


1

I. Dinarisation of the Serbian financial system

In Q1 2017, indicators of financial system dinarisation recorded diverging movements. The degree of

dinarisation of loans increased, while that of deposits and public debt declined.

1. Corporate and household lending

1 Calculated at the exchange rate of the dinar against the euro, US dollar, Swiss franc, pound sterling and Japanese yen as at 30 September 2014,

taking into account the currency structure of loan receivables. 2 Data on the degree of dinarisation of corporate and household loans are available as of July 2008. 3 Excluding the exchange rate effect, this share rose by 0.9 pp to 49.5%.

The degree of dinarisation of corporate and household loans

increased in Q1 2017, reflecting a rise in dinar household

lending.

Corporate and household lending went up in Q1 2017 (RSD

17.0 bln), mainly on account of dinar loans (RSD 14.4 bln).

Thus, the share of dinar in total loans picked up by 0.5 pp to

31.7%. Excluding the exchange rate effect,1 this indicator

reached 32.8% by end-Q1, up by 0.6 pp on the quarter before.

Q1 2017 saw the highest degree of dinarisation of corporate

and household lending on record.2

Broken down by sector, household lending continued up. At

the same time, due to the seasonally lower volume of activity

early in the year and banks’ intensive efforts to resolve the

NPL issue, corporate lending contracted relative to the quarter

before.

Rising each month, household lending exceeded the end-2016

figure by RSD 25.5 bln. More than a half of this rise was

recorded in March. Dinar lending (RSD 19.1 bln) continued to

provide the strongest impetus to growth, with cash loans

(including refinancing loans) constituting the bulk (cash loans

are extended mainly at a term over five years). FX-indexed

and FX household loans experienced the most vibrant

quarterly growth in the past two years, owing to the recovery

of housing loans. Still, this growth (RSD 6.4 bln) was more

modest relative to dinar loans, and the degree of dinarisation

of household loans continued up. At end-Q1, the share of dinar

in total household loans stood at 47.9%, up by 0.8 pp in

quarterly terms.3

Unlike household lending, corporate lending contracted in Q1

(RSD 8.5 bln), reflecting seasonal factors and the write-off and

sale of NPLs to non-banking entities. These factors largely

determined the fall both in dinar and FX-indexed and FX

corporate loans. At the same time, dinar lending posted a

0

5

10

15

20

25

30

35

0

500

1,000

1,500

2,000

2,500

I II III IV I II III IV I II III IV I II III IV I II III IV I

2012 2013 2014 2015 2016 2017

Source: NBS.

Chart I.1.1. Share of dinar lending in total corporate and household lending

Dinar lending (l.s.)

FX-indexed and -denominated lending (l.s.)

Share of dinar lending in total lending (r.s.)

(%)

29.8

19.1

45.0

31.4

20.7

46.3

31.2

19.4

47.0

31.7

19.1

47.9

0

10

20

30

40

50

60

0

500

1,000

1,500

2,000

2,500

Tota

l

Co

rp.

Ho

us.

Tota

l

Co

rp.

Ho

us.

Tota

l

Co

rp.

Ho

us.

Tota

l

Co

rp.

Ho

us.

30.6.2016 30.9.2016 31.12.2016 31.3.2017

Source: NBS.

Chart I.1.2. Lending by sector

Dinar lending (l.s.)

FX-indexed and -denominated lending (l.s.)

Share of dinar lending in total lending (r.s.)

(%)


2

4 Excluding the exchange rate effect, this indicator fell by 0.2 pp to 19.9% at end-Q1.

sharper fall than FX and FX-indexed loans, which dragged

down on their share in total corporate loans by 0.3 pp to 19.1%

at end-March.4

In terms of the structure of bank receivables from the

corporate sector, a decline was noted for receivables from

public enterprises and companies, primarily in transport,

communications, mining and manufacturing sectors. Broken

down by purpose, liquidity and current assets loans remained

dominant (44.2%). At the same time, the percentage of

dinarisation among these loans was the highest. In addition,

owing to the recovery of investment activity, investment loans

accounted for a significant share of bank portfolios (31.1%).

As a rule, these loans were still approved at an FX clause.


3

2. New corporate and household loans

Against the background of seasonally lower corporate

lending, Q1 saw an increase in the degree of dinarisation of

new corporate and household loans.

Following the record high level of new loans approved in

Q4 2016,5 banks extended RSD 280.3 bln worth of new

corporate and household loans, down by RSD 61.5 bln

relative to the quarter before. This is due mainly to a

smaller amount of new FX-indexed and FX loans (RSD

53.2 bln), against the backdrop of a seasonal reduction in

corporate lending early in the year. New dinar loans fell to

a relatively smaller degree (RSD 8.3 bln) and their share in

total new loans increased (by 4.3 pp to 37.6%).

As customary for the start of a year, in Q1 the amount of

new corporate loans declined – by around a fourth

compared to the quarter before (RSD 65.4 bln). In the

structure of corporate loans, the amount of FX-indexed and

FX loans declined the most (RSD 55.3 bln), while dinar

loans decreased to a lesser extent (RSD 10.0 bln). Still, the

corporate sector continued to rely predominantly on FX-

indexed and FX loans. In Q1, 19.5% of new corporate

loans were extended in dinars, up by 1.1 pp from Q4.

In terms of purpose, a reduction in new loans in Q1 was

prompted primarily by the smaller amount of loans for

current assets financing (RSD 32.9 bln). Loans in this

category declined proportionately in RSD and FX and their

degree of dinarisation remained broadly unchanged

(20.8%). Banks extended to the corporate sector a smaller

amount of investment loans as well (RSD 16.4 bln). These

loans made up around a fourth of new loans and were, as a

rule, contracted at an FX clause (95.9%).

In Q1, new household loans reached their historical high of

RSD 99.6 bln.6 Since early 2017, these loans were rising

each month – their highest monthly amount was approved

in March (RSD 44.0 bln). Compared to Q4 2016, the

amount of new household loans picked up by RSD 3.9 bln,

with FX-indexed and FX loans exceeding somewhat dinar

loans. However, dinar loans (70.5%) still made up the bulk

of new household loans, though their share was lower

compared to the quarter before (by 1.1 pp).

In Q1, the rise in new household loans continued to be led

by higher cash loans. These loans constituted almost 60%

of new household loans and were, as a rule, still approved

5 Data on new loans vailable as of Q4 2010. 6 Data on new loans vailable as of Q4 2010.

0

10

20

30

40

50

60

0

50

100

150

200

250

300

350

I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I

2012 2013 2014 2015 2016 2017

Source: NBS.

Chart I.2.1. Share of dinar loans in newly granted corporate and household loans

Dinar loans (l.s.)

FX-indexed and -denominated loans (l.s.)

Share of dinar loans in total loans (r.s.)

(RSD bln) (%)


4

in dinars (over 99%), mainly with the repayment term over

five years (72%). Reflecting favourable trends in the real

estate market and relatively positive conditions of

borrowing with banks, the growth in housing loans

continued as well. These loans accounted for 18% of new

loans and were almost fully approved at an FX clause.


5

3. Corporate and household deposits

Dinar corporate and household deposits declined in Q1,

while FX deposits went up. As a result, the degree of

dinarisation of corporate and household deposits contracted.

Following three quarters of growth, corporate and household

deposits declined in Q1. At end-March 2017, they stood at

RSD 1,936.7 bln, down by RSD 5.2 bln from the quarter

before. Deposits declined on account of reduced balances in

dinar accounts (RSD 27.0 bln), notably of corporates. FX

deposits increased, largely due to a further rise in FX savings.

Consequently, the share of dinar in total corporate and

household deposits fell from 28.8% at end-2016 to 27.5%.7

As regards the structure of corporate deposits, a notable

decline was recorded for dinar deposits (RSD 24.8 bln), as

customary for the start of a year. A more substantial decline

was observed for transaction accounts of enterprises, whose

dinar savings and term deposits, however, showed a more

modest fall. The strongest contraction was recorded for

balances in dinar accounts of enterprises in the fields of trade

and manufacturing, and in accounts of public enterprises in

the field of energy which were paying for increased energy

imports in this period. Unlike dinar deposits, balances in FX

accounts and dinar FX-indexed deposits of enterprises

continued up. By end-March, they reached EUR 2.5 bln, up

by EUR 38 mln from late last year.

Against the background of reduced balances in dinar accounts

and an increase in balances in FX accounts of enterprises, Q1

saw a decline in the degree of dinarisation of corporate

deposits. At end-March, it stood at 51.8%, down by 2.3 pp

compared to late 2016.

By contrast to corporate deposits, household deposits went up

in Q1 (RSD 13.7 bln) due to rising FX deposits. Dinar

household deposits shrank in the same period reflecting

primarily lowered balances in current accounts of households.

Therefore, the degree of dinarisation of household deposits

fell from 15.8% at end-2016 to 15.4% at end-Q1.

7 Excluding the exchange rate effect, the share fell by 1.3 pp to 28.6%.

0

5

10

15

20

25

30

0

500

1,000

1,500

2,000


2012 2013 2014 2015 2016 2017

Source: NBS.

Chart I.3.1. Share of dinar deposits in total corporate and household deposits

Dinar deposits (l.s.)

FX-indexed and -denominated deposits (l.s.)

Share of dinar deposits in total deposits (r.s.)

(RSD bln) (%)

25.8

51.1

14.2

27.3

52.7

14.9

28.8

54.0

15.8

27.5

51.8

15.4

0

10

20

30

40

50

60

70

0

250

500

750

1,000

1,250

1,500

1,750

2,000

Tota

l

Co

rp.

Ho

us.

Tota

l

Co

rp.

Ho

us.

Tota

l

Co

rp.

Ho

us.

Tota

l

Co

rp.

Ho

us.

30.6.2016 30.9.2016 31.12.2016 31.3.2017

(%)

Source: NBS.

Chart I.3.2. Deposits by sector

Dinar deposits (l.s.)

FX-indexed and -denominated deposits (l.s.)

Share of dinar deposits in total deposits (r.s.)


6

4. Dinar and FX savings

Since early 2017, dinar and FX savings rose at a similar pace

and the share of dinar in total savings remained unchanged

compared to end-2016 (4.5%).

Dinar savings continued up in 2017. Since early-year, they

gained RSD 0.9 bln, equalling RSD 51.3 bln at end-March,

this being their highest value on record. An extended period of

low and stable inflation, relative stability of the exchange rate,

higher interest rates and more favourable tax treatment

compared to FX savings propped up their growth.

Similarly to the quarter before, rising dinar savings in Q1

reflect an increase in under one-year deposits (RSD 1.3 bln),

while savings deposits with longer maturities declined (RSD

0.4 bln). This prompted further changes in the maturity

structure of dinar savings in favour of savings deposited for a

term shorter than one year. At end-Q1, they made up 87% of

total dinar savings.

FX household savings were also on a rise, touching their new

highest level. Since early 2017, total balances in FX accounts

of citizens increased by EUR 95.4 mln to EUR 8,769.1 mln at

end-March. In terms of the maturity structure of FX savings, a

rise in deposits with the maturity shorter than one year (EUR

230.7 mln) was recorded again, most notably demand

deposits. The amount of savings deposited on shorter terms

declined (EUR 135.2 mln), notably due to a contraction in

savings deposits termed from one to two years. This increased

the availability of savings deposits with maturities shorter than

one year – these savings made up 82% of total FX savings at

end-Q1.

0

10

20

30

40

50

60


2012 2013 2014 2015 2016 2017

Chart I.4.1. Dinar and FX savings

Dinar savings

(in bln RSD)

0

2

4

6

8

10


2012 2013 2014 2015 2016 2017

(in bln EUR)

FX savings

Source: NBS.

Up to 3 months; 37.5%

3-6 months;

8.3%

6 months-1 year; 40.9%

1-2 years; 4.9%

Over 2 years; 8.4%

Chart I.4.2. Maturity structure of dinar savings (31 March 2017)

Source: NBS.

Up to 3 months; 56.7%

3-6 months;

2.3%

6 months-1 year; 23.2%

1-2 years; 5.6%

Over 2 years; 12.2%

Source: NBS.

Chart I.4.3. Maturity structure of FX savings (31 March 2017)


7

5. Public debt

8 Generally the IBRD – for the financing of restructuring of state-owned enterprises, public administration development and infrastructural

projects. 9 In Q1 the euro gained 1.3% relative to the dollar.

In Q1, the government reduced its FX and dinar debt. The

share of the dinar portion of public debt in total public debt

declined, partly due to greater reliance on FX financing in the

domestic securities market.

At end-Q1, public debt was worth RSD 3,043.1 bln, down by

RSD 21.5 bln from late 2016. The amount of debt contracted

in all currencies, apart from the euro. The dinar portion of

debt declined the most (RSD 17.3 bln or 2.7%) due to smaller

amounts of new borrowing relative to debt repayment based

on maturing dinar securities issued in the domestic market.

Compared to dinar borrowing, the FX portion of public debt

declined to a lesser extent (in dinar terms, by RSD 4.2 bln or

0.2%).

In terms of the structure of FX portion of public debt,

borrowing in dollars declined the most (EUR 55.7 mln),

mainly in respect of the repayment of a portion of debt to the

Paris club creditors and creditors under bilateral

intergovernmental arrangements.

However, the euro portion of public debt went up (EUR 67.6

mln), mainly in respect of borrowing with international

creditors8 and the issuance of government securities in the

domestic market. On the other hand, the government was

repaying its euro debt most notably on account of regulation

of earlier guarantees to public enterprises.

Reflecting the above trends, the dinar share of public debt

declined (by 0.4 pp to 20.5%). The euro and dollar portions of

public debt were still the largest (40.5% and 33.6%

respectively). Cross-currency changes which in the earlier

period significantly impacted the public debt structure

contributed in Q1 to a rise in the euro portion and a decline in

dollar portion of total public debt.9

In respect of securities issued in the domestic market, public

debt reached RSD 995.0 bln at end-Q1, down by RSD 5.7 bln

from end-2016. Government borrowing in respect of dinar

securities declined and that in respect of FX securities

increased. As a result, the share of dinar securities in the

portfolio of government securities fell from 63.3% in late

2016 to 61.9%.

The portfolio of dinar securities with maturities over one year

witnessed a decline in Q1 (RSD 17.4 bln) and reached RSD

0

5

10

15

20

25

0

500

1.000

1.500

2.000

2.500

3.000

3.500


2012 2013 2014 2015 2016 2017

(%)

Chart I.5.1. Share of dinar debt in total RS public debt

Dinar debt (l.s.)

FX debt (l.s.)

Share of dinar debt in total RS public debt (r.s.)

(RSD bln)

Source: Ministry of Finance.

RSD; 20.5%

EUR; 40.5%

USD; 33.6%

CHF; 0.5%

SDR; 3.6%

other currencies

*; 1.3%

Chart I.5.2. Currency structure of RS public debt (31 March 2017)

* GBP, JPY, DKK, SEK, NOK


0

200

400

600

800

1.000

1.200

I II III IV I II III IV I II III IV I II III IV I II III IV

2012 2013 2014 2015 2016

Chart I.5.3. Maturity structure of government securities issued on the domestic market(end-quarter data)

Short-term dinar denominated securities (T-bills)

Long-term dinar denominated securities

Long-term euro denominated securities

(RSD bln)



8

615.0 bln at end-March 2017. This reflects maturing

government securities with somewhat shorter maturities (53

weeks and three years). On the other hand, the government

borrowed longer-term, increasing its borrowing in respect of

seven-year securities.

As regards securities with initial maturities of up to one year,

in early March the government issued six-month securities.

Time-wise, this issuance corresponds to the maturity of earlier

issued securities of the same initial maturity. Thus, the

portfolio of these securities remained broadly unchanged

throughout the period observed (RSD 0.8 bln or 0.1% of the

total portfolio of dinar government securities). As a result, the

average remaining maturity of the portfolio of dinar

government securities stayed unchanged relative to end-2016

(27.1 months).

Based on FX government securities issued in the domestic

market, public debt went up by EUR 81.3 mln to EUR 3,058.6

mln at end-Q1. This growth was almost fully driven by

borrowing in respect of issuance of five- and ten-year

securities (EUR 98.4 mln and EUR 82.1 mln, respectively),

and to a lesser extent in respect of bonds with initial three-

year maturity (EUR 42.5 mln). On the other hand, the

portfolio of two-year and 53-week securities decreased (by

EUR 95.3 mln and EUR 46.6 mln, respectively).

In Q1, trading in government dinar securities was worth RSD

145.1 bln, of which around RSD 4.8 bln was took place on the

Belgrade Stock Exchange. Compared to Q4 2016, secondary

trading increased by RSD 29.3 bln, which is somewhat more

than a third.

The growth in secondary trading volumes was fully the result

of elevated trading in securities with initial three-year

maturity, which is why these securities had the largest share in

secondary trading (85%). Trading volumes following the

settlement of primary sale of securities were relatively modest

(around RSD 2.5 bln or 1.7% of total trading in these

securities in the secondary market).

0

20

40

60

80

100

120

140

I II III IV I II III IV I II III IV I II III IV I II III IV

2012 2013 2014 2015 2016 2017

Chart I.5.4. Secondary trading in dinar government securities

3-m 6-m 12-m 53-w 18-m 2-y 3-y 5-y 7-y 10-y

(RSD bln)

Source: Ministry of Finance and CSD.

0

30

60

90

120

150


2012 2013 2014 2015 2016 2017

(RSD bln)

Chart I.5.5. Secondary trading in dinar government securities excluding transactions effected up to two business days from the primary settlement date

Total trading in dinar securities

Trading excluding transactions executed up to two business days from theprimary settlement date

Source: Ministry of Finance and CSD.


9

II. FX hedging instruments

1. FX swap auctions

In Q1, the NBS continued with regular three-month and two-

week FX swap auctions.

At 24 regular three-month FX swap auctions organised in Q1,

the NBS swap sold and bought EUR 48.5 mln. The highest

performance was recorded in March when the NBS swap sold

and bought EUR 21.0 mln.

The NBS held 26 regular two-week auctions, where it swap

sold and bought EUR 105.0 mln (vs. EUR 18.0 mln in the

quarter before). The highest volume of swaps was recorded in

March when the NBS swap sold and bought EUR 41.0 mln.

At all auctions held, the NBS swap bought and sold the same

amount, but with a positive difference in swap points, which

indicates interest in developing interbank swap trading, i.e.

domestic interbank swap market.

For the purpose of liquidity management, in Q1 banks entered

into 12 interbank swap transactions of purchase and sale of

FX for dinars, worth EUR 112.8 mln (vs. EUR 32.6 mln in

the quarter before). The average weighted maturity of these

transactions was seven days.

Period Sw ap FX sale Sw ap FX purchase

2012 171.0 188.0

2013 124.0 124.0

2014 180.0 180.0

2015 550.5 550.5

2016 440.0 440.0

2017

Q1 153.5 153.5

2017 153.5 153.5

Source: NBS.

Table II.1.1. NBS swap transactions, quarterly data

(EUR mln)


10

2. FX hedging instruments

Resident transactions with banks in Q1 mainly related to

forward purchases of foreign currency for dinars (a total

of EUR 202 mln, or EUR 39.7 mln more than in Q4).

The share of forward FX purchases by residents from

banks in total FX purchases equalled 6.7% in Q1 (5.0% in

Q4), and was the highest in March – 8.2%10

, this being

the highest level since records began (January 2012).

Eleven domestic enterprises hedged against FX risks by

entering into this type of transaction with banks. The

weighted average maturity of forward FX purchases was

31 days, while the longest weighted average maturity was

recorded in March – 64 days. The value of forward FX

purchase contracts of residents averaged EUR 1.0 mln.

The currency structure of forward deals was dominated

by the euro – 67.9%. The US dollar accounted for 32.1%.

Q1 saw four forward FX sales by two residents, with the

total value of EUR 5.2 mln and average weighted

maturity of 321 days (EUR 4.7 mln in Q4).

10 The share of forward purchases of 8.2% in totalFX purchases by residents from banks was also recorded in December 2016.

Amount in

EUR mln

Weighted

av erage

maturity in

day s

% share in

total

purchase

Amount

in EUR

mln

Weighted

av erage

maturity

in day s

% share in

total sale

2012 754.7 38 6.7 1.3 18 0.0

2013 533.8 24 5.0 1.4 39 0.0

2014 430.0 24 5.0 0.8 49 0.0

2015 531.0 16 4.8 1.5 77 0.0

2016 450.5 22 3.9 12.9 263 0.1

2017

Q1 202.0 31 6.7 5.2 321 0.2

Total in 2016 202.0 31 6.7 5.2 321 0.2

Source: NBS.

Table II.2.1. FX forward transactions between residents and banks,

quarterly data

Period

Forward purchase by residents Forward sale by residents

Amount in

EUR mln

Weighted

av erage

maturity in

day s

% share in

total

purchase

Amount

in EUR

mln

Weighted

av erage

maturity

in day s

% share in

total sale

January 36.0 13 3.8 1.4 364 0.2

February 70.2 23 7.8 1.4 365 0.2

March 95.8 64 8.2 2.4 268 0.3

Total in Q1 202.0 31 6.7 5.2 321 0.2

Total in 2017 202.0 31 6.7 5.2 321 0.2

Source: NBS.

Table II.2.2. FX forward transactions between residents and banks in

2017, monthly data

Month

Forward purchase by residents Forward sale by residents

USD 32.1%

EUR 67.9%

Chart II.2.1. Currency structure of FX forward transactions between residents and banks in Q1 2017

Source: NBS.


11

Corporates Households Total Corporates Households Total Corporates Households Total

2008 33.8 22.2 29.2 0.0 0.0 0.0 50.3 12.5 27.6 2.5 2.6

2009 26.2 22.1 24.7 0.0 0.0 0.0 52.5 10.9 25.6 2.1 12.8

2010 32.2 27.6 30.5 41.8 50.5 43.4 45.0 8.5 19.8 1.8 14.6

2011 27.3 32.6 29.2 33.3 44.0 36.0 44.9 10.1 21.5 2.4 16.1

2012 24.2 35.1 28.0 31.0 59.6 36.5 43.9 8.8 19.3 1.9 19.1

2013 20.0 37.9 26.8 24.7 63.6 35.0 52.4 11.5 23.1 3.5 20.3

2014 25.0 41.0 31.2 33.2 71.7 44.2 53.6 12.3 24.5 3.7 21.4

2015 19.3 42.8 28.6 16.8 67.8 30.3 55.6 13.9 27.2 4.3 22.2

2016 19.4 47.0 31.2 21.5 74.1 36.8 54.0 15.8 28.8 4.5 20.9

2017 I 19.1 47.9 31.7 19.5 70.5 37.6 51.8 15.4 27.5 4.5 20.5

* Unless otherwise stated, indicators show data at end-period.

** Indicators are construed based on data on the amount of newly approved loans during the period. For the year 2010, indicators relate to the period

September-December.

Table А. Dinarisation indicators

(in %)

Period*

Share of dinar in total lending,

outstanding amounts

Share of dinar in total lending, new

business**

Share of dinar in total deposits,

outstanding amounts Share of dinar in

total household

savings

Share of dinar

in total public

debt


12

Methodological notes

1. Lending includes dinar and FX (including FX-indexed) loans, advances, securities, corporate shares,

receivables from interest and charges. Dinar loans are loans extended in dinars without an FX-

clause. An FX-clause is a currency clause as defined by the Law on Foreign Exchange Operations

and any other clause stipulating hedge against the risk of dinar exchange rate volatility.

2. Lending is expressed by the gross principle, i.e. it is not reduced by value adjustment. When

excluding the exchange rate effects, the exchange rate of the dinar against the euro, Swiss franc and

US dollar is taken into account.

3. In line with the ECB methodology, the category of newly granted loans also includes re-scheduled

loans.

4. In line with the ECB methodology, the household sector includes entrepreneurs and non-profit

institutions serving households.

5. Deposits include dinar and FX (including FX-indexed) deposits.


13

Index of charts and tables

Charts

I.1.1. Share of dinar lending in total corporate and household lending 1

I.1.2. Lending by sector 1

I.2.1. Share of dinar loans in newly granted corporate and household loans 3

I.3.1. Share of dinar deposits in total corporate and household deposits 5

I.3.2. Deposits by sector 5

I.4.1. Dinar and FX savings 6

I.4.2. Maturity structure of dinar savings (31 March 2017) 6

I.4.3. Maturity structure of FX savings (31 March 2017) 6

I.5.1. Share of dinar debt in total RS public debt 7

I.5.2. Currency structure of RS public debt (31 March 2017) 7

I.5.3. Maturity structure of government securities (end-of-quarter data) 7

I.5.4. Secondary trading in dinar government securities 8

I.5.5. Secondary trading in dinar government securities excluding transactions effected up to two business days from the primary settlement date

8

II.2.1. Currency structure of FX forward transactions between residents and banks in Q1 2017 10

Tables

II.1.1. NBS swap transactions, quarterly data 9

II.1.2. NBS swap transactions in 2017, monthly data 9

II.2.1. FX forward transactions between residents and banks, quarterly data 10

II.2.2. FX forward transactions between residents and banks in 2017, monthly data 10

А Dinarisation indicators 11

REPORT ON DINARISATION OF THE SERBIAN FINANCIAL SYSTEM · increased in Q1 2017, reflecting a rise...

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