---

12/05/2020

At today’s meeting, the Council of the Central Bank of Montenegro (CBCG) adopted the Decision Amending the Decision on Bank Reserve Requirement to be Held With the Central Bank of Montenegro. This Decision reduces the rate of reserve requirement that banks are required to deposit with the CBCG by two percentage points.

In the future, banks will calculate the reserve requirement by applying a 5.5% rate instead of the current 7.5% (on the part of the base including demand and term deposits with a maturity less than one year, i.e. up to 365 days), and a rate of 4.5% instead of the previous 6.5% (on the part of the base including deposits with a maturity over one year, i.e. over 365 days).

The decision was adopted primarily to provide an additional banking sector’s contribution to mitigating the consequences of the new coronavirus by releasing part of the banks’ funds used to maintain reserve requirement, increase the available liquidity and lending potential of banks in Montenegro.

We also note that with this change has gradually harmonised the reserve requirement instrument with the regulations of the European Central Bank in this area.