Minister Radunović and Governor Žugić in Washington: Meetings with the IMF and the World Bank Officials
18/10/2019
During the first day of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank held in Washington, the delegation of Montenegro led by the Minister of Finance, Mr. Darko Radunović, and the Governor of the CBCG, Mr. Radoje Žugić, met with the Vice-President of the World Bank for Europe and Central Asia, Cyril Miller, the Executive Director at the World Bank, Koen Davidse, and the Head of the IMF Mission to Montenegro, Srikant Seshadri.
The topics of the meetings included macroeconomic and fiscal developments in Montenegro, particularly strong economic growth, its main drivers being investment spending and exports of tourist services. The meetings also focused on the implementation of priority actions for obtaining the second part of the World Bank’s Development Policy-Based Guarantee to Montenegro (PBG2), as an important instrument to diversify the sources of public debt refinancing. The attendees agreed jointly that all activities should be accelerated to approve PBG2 by the end of the current year.
The Vice-President of the World Bank, Cyril Miller, congratulated the Ministry of Finance on very successful issue of Eurobonds with a view to refinancing a portion of public debt in 2020, and on the progress in the implementation of all World Bank financed projects in Montenegro, especially the industrial waste management project.
Governor Žugić presented the latest indicators of banking operations in Montenegro. Along with the growth trends of assets, loans, deposits and capital, the banking system is characterised by profitability and historically minimum value of non-performing loans, which stood at 4.67% at the end of this September. “In the coming period, the CBCG will focus on implementing the banking system’s asset quality review (AQR), further improving of legislation, supervision strengthening, and payment system modernisation,” emphasised Governor Žugić.
The Vice-President Cyril Miller congratulated to the CBCG on significant success in the resolution of ailing banks.
The delegation also met with the Head of the IMF Mission to Montenegro, Mr. Srikant Seshadri, who also commended the highly successful Eurobond issue, attracting a large number of investors from around the world. Seshadri stressed the importance of continuing the implementation of structural reforms in the area of tax policy, as well as in the labour market, through the adoption of a new law, and in the rationalisation of the number of employees in public administration.
The Head of the IMF Mission congratulated on the CBCG’s the progress in meeting the IMF's recommendations, and on the recently adopted macro-prudential measures adopted by the CBCG to further maintain the financial system’s stability as well as to maintain a sustainable level of financing for natural persons. The reforms undertaken by the CBCG in strengthening the institutional framework and capacities for the money laundering and terrorist financing prevention have been particularly commended, giving full support to the CBCG's efforts for moving to risk-based supervision in this area. The CBCG's initiative to implement FSAP’s key recommendation - AQR of all banks, and the adoption of key legislation (Credit Institutions Law, Credit institution resolution law, and Deposit Protection Law) that aligns the regulatory framework governing financial market significantly with the best EU practice, have also been commended.
During the first day of stay in Washington, our delegation also held a series of meetings with representatives of several international banks and rating agencies.