CBCG Successfully Tests its Remote Disaster Site
13/05/2023
The CBCG tested its remote disaster site today. The testing confirmed the provision of all the conditions for operating the remote location to which all key CBCG functions could be transferred and ensure its business continuity, if an incident preventing the operation of the central and CBCG backup location in Podgorica (e.g. natural disaster, terrorist attack, etc.).
The testing of the reserve location operation was preceded by the 139th meeting of the Central Bank of Montenegro Council chaired by the CBCG Governor Radoje Žugić.
The Council analysed the Financial Stability Report 2022 and concluded still present, still moderate, systemic risks at the end of the previous year.
The financial position of citizens and businesses, the two main groups of clients to which banks are exposed, is still affected by uncertainty, especially in the unfavourable global environment. Pressures in state finances continue to represent a systemic risk, bearing in mind the high level of public debt in a situation of rising interest rates and tighter financing conditions on the international market. Adequate fiscal measures must be created and implemented to reduce this risk. Analysing the banking sector’s exposure to the State, the Council concluded that it was not a threat to financial stability currently but required careful monitoring by the CBCG.
The Council also adopted the Price Stability Report 2022. It analysed the inflation trend in Montenegro during the previous year, which showed the highest inflation since the restoration of independence in 2006 and gave a forecast for the current year. The annual inflation rate in 2022 was 17.2%. Prices under “food and non-alcoholic beverages”, “housing, water, electricity, gas and other fuels,” and “transportation” had the highest contribution to price growth. Future inflation trend forecasts show inflation to decline in 2023, so the CBCG model forecast for the end of the current year projected inflation from 2.9% to 5.7%, with a 4% central trend. The CBCG expert assessment forecasted a slightly higher inflation rate for the end of the year, ranging from 3% to 7%.
To harmonise domestic regulations in bank bankruptcy and resolution with applicable EU regulations, the Council determined the Draft Law Amending the Bank Bankruptcy and Liquidation Law. Furthermore, to comply with the Law Amending the Payment System Law, which shall enter into force on 8 October this year, the Council adopted the Decision on the manner of keeping the register of payment institutions and the register of electronic money institutions.
The Council also adopted the Report on Central Bank operations and implementation of the Central Bank Policy in January and February 2023 and discussed other issues under its competence.