Interest Rates of the National Bank of Serbia

Main NBS Interest Rates

NBS Interest Rates Applied in Money Market Operations

As provided by the Guidelines for Setting NBS Interest Rates Applied in Money Market Operations (“RS Official Gazette”, No. 73/2006), the Monetary Policy Committee sets the level of key policy rate and main interest rates applied by the NBS in money market operations.

Key policy rate has the role of signaling the monetary policy stance, as well as the role of benchmark interest rate because the level of money market interest rates i.e. interest rate corridor, is set with reference to this rate.
Key policy rate is the highest and/or lowest interest rate applied by the National Bank of Serbia in the conduct of two-week (12 to 16 days) repo transactions of sale and/or purchase of securities. Key policy rate is set pursuant to the Decision on the Level of Key Policy Rate of the National Bank of Serbia Applied in Money Market Operations .

Interest rate corridor, i.e. the highest and lowest interest rate used by the NBS in the conduct of money market operations, is established based on the level of key policy rate. The highest interest rate is the rate on lending facility (O/N daily liquidity loan), while the lowest interest rate used by NBS in the above transactions is the rate on deposit facility (overnight deposits with NBS).

Other NBS Interest Rates

Decision on Interest Rates Applied by the National Bank of Serbia in the Implementation of Monetary Policy (“RS Official Gazette”, Nos. 73/2006, 103/2006, 110/2006, 31/2007, 50/2007, 35/2008, 52/2008, 94/2008 and 44/2009) specifies the level of interest rates on lending and deposit facilities, as well as the level of other NBS lending and deposit rates.

The National Bank of Serbia charges interest to commercial banks on:

1. the amount of overnight loan for maintaining daily liquidity, extended against a collateral of securities (liquidity loan) – by applying the interest rate equal to the key policy rate increased by 2.5 percentage points; 

2. the amount of loans and other lending that have not been repaid within the agreed period, and/or that are used contrary to regulations, and on the amount of interest that has not been paid within the agreed or prescribed period – by applying the interest rate equal to the key policy rate increased by 12 percentage points;  

3. on the amount of difference between the calculated amount and actual average daily balance of allocated dinar required reserves in the maintenance period lasting from the 18th of the month to the 17th of the following month (hereinafter: maintenance period), and on the amount of difference between the prescribed and calculated dinar required reserves in the maintenance period - by applying interest rate equal to 150% of the key policy rate;

3a.on the amount of difference between the calculated and actual average daily balance of allocated foreign currency required reserves in the maintenance period and on the amount of difference between the prescribed and calculated amount of foreign currency required reserves in the maintenance period – by applying interest rate equal to the three-month EURIBOR applicable on the date of interest calculation, increased by 10 percentage points.

The National Bank of Serbia pays interest to banks on:

1. the amount of actual average daily balance of allocated dinar required reserves in the maintenance period which does not exceed the amount of calculated dinar required reserves – by applying the interest rate of 2.5% p.a.;

2. the amount of funds deposited by bank with the National Bank of Serbia in accordance with the decision governing the conditions and manner of depositing excess liquidity with the National Bank of Serbia (deposit facility) – by applying interest rate equal to the key policy rate reduced by 2.5 percentage points.

In addition to the above, the National Bank of Serbia pays/charges interest in the transactions of purchase and sale of securities in the open market by applying interest rates set by the Governor in line with the decision on the requirements for and manner of conducting open market operations by the NBS.