Žugić: The banking system in Montenegro is stable

The banking system in Montenegro is stable, announced the Governor of the Central Bank (CBCG), Radoje Žugić, and added that key balance positions are recording positive trends and reaching record levels.

Žugić is attending the annual meeting of the Belgian-Dutch constituency of the World Bank (WB) and the International Monetary Fund (IMF) in Sarajevo.

As part of the event, the Montenegrin delegation held bilateral meetings with senior officials of the IMF, namely Deputy Director General Bo Lie, Executive Director Paul Hilbers and Director of the Sector for Europe Alfred Kamer, as well as with representatives of the World Bank, i.e. its Vice President Anna Bjerde and executive by director Koen Davidse.

As reported by the CBCG, Žugić informed the interlocutors about the current economic situation in Montenegro, with a special emphasis on the situation in the banking sector.

According to Žugić, the lending activity of banks in Montenegro this year is very intense, with the system's stability preserved and clients' trust maintained.

In seven months of this year, banks approved 826,8 million new loans, which is 37 percent more compared to the same period last year, 74 percent more compared to 2020, and 27 percent more compared to pre-crisis 2019.

"Also, deposits continue the trend of growth, which, in the first seven months of this year, amounted to over 600 million euros, which confirms the confidence of clients in the banking sector, as well as in the regulator," the statement added.

Li and Davidse expressed their satisfaction with the positive situation in the banking sector of Montenegro and welcomed the efforts that the CBCG invests in preserving the stability and health of credit institutions.

They also expressed their satisfaction with the cooperation with the CBCG, with an open call for it to intensify even more in the coming period and focus especially on current challenges.

In addition to high-ranking representatives of the World Bank and the IMF, the meeting in Sarajevo is attended by delegations from 15 member countries of the Constituency, led by finance ministers and central bank governors.

"The main topic of this year's meeting of the Constituent Assembly is related to the current and future programs and policies of the World Bank and the IMF, which are dedicated to finding solutions for current global economic challenges, primarily high inflation and energy insecurity," said the CBCG.

High-ranking officials of those institutions pointed out that, due to the current geopolitical situation and the consequences of the previous economic and health situation, the risks related to macroeconomic and financial stability in the coming year are highly emphasized.

The war in Ukraine could further exacerbate the gas supply problem, while curbing inflation could have more severe than expected consequences for the global economy.

In addition, as stated, stricter financial conditions on the global market could cause problems in debt servicing, especially for countries with pronounced fiscal vulnerabilities.

"At the meeting, it was confirmed that the next annual meeting of the Belgian-Dutch constituency will be held in Montenegro. On this occasion, Žugić expressed the hope that the meeting in the coming year, despite the bleak outlook, will be held in a more favorable environment, without wars, pandemics and with contained inflation," the announcement concludes.