The CBCG Council adopts the ninth anti-crisis measures package
Today, the Central Bank of Montenegro Council held its 97th meeting chaired by Governor Radoje Žugić.
Today, the Council adopted the Decision amending the Decision on interim measures to mitigate negative impact of the communicable disease COVID-19 epidemic on the financial system. The amended decision gives loan users the right to use the moratorium until 31 August 2021. In addition to the previously determined categories of companies, loan beneficiaries whose total revenues in 2020 were at least 50% lower than in 2019 are also included. We remind that the mandatory moratorium measure for natural persons is still in force for loan beneficiaries to whom employment terminated on 31 March 2020 or later due to the COVID-19 epidemic.
At today’s meeting, the Council discussed and adopted the Report on Business Operations and Policy Implementation of the Central Bank of Montenegro for March 2021 was discussed and adopted. It stated that the CBCG activities conducted this March were according to the planned obligations determined by the CBCG Work Program for 2021.
Today, the Council also considered and adopted the Macroeconomic Report of the Central Bank of Montenegro for 2020. Discussing the Report, it concluded that coronavirus pandemic affected macroeconomic developments in Montenegro and many other countries in 2020 extremely. According to preliminary MONSTAT data, the Montenegrin economy in 2020 recorded a 15.2% decline. The tourism sector was the most affected. The number of tourists decreased by 83.2% and the number of overnight stays by 82.1%. Negative trends were recorded in the labour market, where the number of employees in all sectors decreased. The number of unemployed persons in 2020 increased by 13.4% compared to 2019. According to preliminary Ministry of Finance data, the budget deficit at the end of 2020 amounted to 10.1% of GDP, while public debt reached 105.2% of GDP. These indicators indicate a high risk, which will be very challenging to manage in the coming period. It was concluded that a significant economic recovery could not be expected without a stronger generation of consumption, especially investment.
The Council also adopted the reports on the operations of banks, microfinance institutions and the Investment and Development Fund for 2021Q1. It stated that all key balance sheet items have been growing since the beginning of the year. The banking system’s security and stability have been preserved, expressed primarily through a solvency ratio of 19.3% at the end of Q1. It was significantly the result of the previously defined CBCG measures of restricting the distribution of realised profits, i.e. its focusing on strengthening capital. During the first four months of the current year, banks approved EUR 318 million in new loans, 32% more than in the comparable period last year. Thus, in addition to the moratorium, as a measure of temporary suspension of payment of liabilities, no less important was the liquidity support that banks provide to the real sector through the loans approval.
The deposits growth continued in 2021, due to the decreased propensity to spend and as a sign of the banking system’s confidence.
The pandemic impact is noticeable at the non-performing loans, which amounted to 5.52% at the end of this April. As a comparison, they stood at 4.7% at the end of 2019, i.e. before the corona crisis.
Considering the Investment and Development Fund’s operations report, it stated that, during the first four months of this year, the Fund approved loans totalling 8 million euros for 29 clients. Non-performing loans increased compared to the comparable period last year and currently amount to 11.17%.
The Council also adopted the Report on Payment Systems Oversight for 2020. It was stated that the CBCG payment system, which consists of RTGS and DNS systems, operated smoothly and without downtime in 2020. A total of 10.6 million payments were made worth 15.1 billion euros, which is 7.7% or 10.5% less than in 2019.
The Council adopted the Decision Amending the Decision on the Contents of the Central Registry of Transaction Accounts. The amendment enables the keeping of transaction accounts of non-residents in the registry because they can also be enforcement debtors according to the Law on Enforcement and Securing of Claims.
At today’s meeting, the Council also discussed other current issues under its competence.