Deposits in national currency for the first time higher than those in foreign currencies

The value of household deposits in national currency in Bosnia and Herzegovina is for the first time higher than that of foreign currency deposits, indicating the growth of confidence in the national currency and the recovery of savings in Bosnia and Herzegovina .

According to the latest available data from the CBBH, total household deposits with commercial banks in BiH amounted to BAM 14.22 billion at the end of September 2022.

On an annual basis, household deposits, at the end of September, registered a decrease of BAM 271.8 million or 1.9%, which is mainly a consequence of the withdrawal of deposits and the uncertainty due to the war. in Ukraine in the period from March to May , followed by the regrowth of deposits. A change in preference in terms of liquidity is observed, with citizens significantly increasing their holdings of highly liquid deposits available in the short term (transaction deposits are up by 10.7%), while a drop of 13.8% is recorded on time and savings deposits.

By maturity structure, term and savings deposits at the end of September 2022 amounted to BAM 4.70 billion, or 33.1% of total household deposits, including short term deposits. Term deposits accounted for 356 million BAM (7.6%), while long term deposits accounted for 4.35 billion BAM (92.4%). Transaction accounts and demand deposits amounted to BAM 9.52 billion and accounted for 66.9% of total household deposits, of which transaction accounts amounted to BAM 5.72 billion, while demand deposits amounted to BAM 3.80 billion.

Regarding the monetary structure, a significant change has occurred recently, reflected in total local currency deposits exceeding total foreign currency deposits. Deposits in local currency reached the amount of BAM 7.29 billion representing 51.3% of the share, while deposits in euros and in BAM with monetary indexation on the euro amounted to BAM 6.26 billion. BAM i.e. 44.0%. Savings in other foreign currencies were quite modest, amounting to BAM 674 million or 4.7% of the share.

Most citizens believe that saving is important, but few are able to save regularly on a monthly level, especially on these days when inflation reduces purchasing power. Citizens of BiH save in order to build up reserves for more difficult times that may arise, and a proportion of them save in order to finance larger purchases or holidays.

Local depository institutions are a safe place for local depositors, and public regulatory institutions carefully monitor their operations to ensure that household savings are managed in a regulated and safe manner.

Household deposits are the main source of funding for local banks and account for by far the largest share of 49.6% of total deposits in commercial banks, with all institutions concerned paying great attention to their protection, said the CBBH.

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