More intensive cooperation with the World Bank and the IMF announced
12/10/2022
The Montenegrin delegation led by the Minister of Finance Aleksandar Damjanović and the Governor of the Central Bank of Montenegro (CBCG) Radoje Žugić, is participating in the Annual meeting of the International Monetary Fund (IMF) and the World Bank (WB) held in Washington.
The Montenegrin delegation met with the Vice-President of the World Bank for Europe and Central Asia, Anna Bjerde, the World Bank Executive Director, Koen Davidse, the IMF’s European Department Director Alfred Kammer, and the Head of the IMF Mission for Montenegro, Srikant Seshadri.
At the mentioned meetings, the global economy’s challenges were discussed, primarily related to the war in Ukraine, high inflation and energy insecurity, and the prolonged duration of the COVID-19 pandemic.
Minister Damjanović emphasised that the Government and Parliament showed high responsibility by recently adopting the rebalance. It undoubtedly contributes to the country’s more stable financial climate and a more predictable environment for possible arrangements with the commercial financial sector. Financial stability and predictability, as well as a realistically planned and sustainable budget policy for the current and next year, although in an unstable political environment, give the right that Montenegrin citizens and the economy can expect recovery, both in public finances and in the real sector. The accelerated realisation of long-started projects with the World Bank and the announcement of new arrangements indicate that the state’s credibility with key international financial partners is returning. Along with the World Bank’s high representatives, the IMF representatives also expressed their readiness for more intensive cooperation with the Montenegrin side. In addition to very useful and fruitful discussions with representatives of the IMF mission to Montenegro, Minister Damjanović also held a meeting with representatives of that institution’s Fiscal Affairs Department (FAD), led by Juan Toro, Assistant Director in charge of Montenegro. At the meeting, they discussed concrete opportunities for technical and advisory support the IMF provides and intends to provide to Montenegro.
Governor Žugić pointed out that, despite the challenging macroeconomic environment and fiscal risks, Montenegro’s financial system is healthy and stable, primarily owing to the Montenegrin banking sector’s good performance. Namely, banks in Montenegro are sound, highly liquid and adequately capitalised, while client trust is exceptionally high, best reflected in the record level of deposits.
“The adequate selection and timely implementation of 11 sets of measures, primarily aimed at supporting the economy and citizens, the liquidity and stability of the banks has been preserved,” Žugić pointed out. He added that the CBCG is currently implementing activities to prevent the increase in non-performing loans share in total loans. It is done through daily reporting and communication with banks, improvement of on-site and off-site controls, and more frequent supervision and monitoring of macroeconomic indicators and external risks. Moreover, due to the high inflation rates and the Euribor growth, the CBCG implements activities to mitigate the consequences of a potential interest rate increase in the country through instructions given to banks for the timely preparation of client protection programmes.
Along with Minister Damjanović and Governor Žugić, the Montenegrin delegation also includes Bojan Paunović, the acting Director General of the Directorate for the State Budget in the Ministry of Finance and Marijana Mitrović, the Director of the Department for Financial Stability, Research and Statistics at the CBCG.
Ministry of Finance and Central Bank of Montenegro