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Mandatory reserve of 290.4 million EUR

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The mandatory reserve of banks at the end of January, according to data from the Central Bank (CBCG), amounted to 290.4 million EUR.

Of the total amount, 71.31 percent was allocated to the accounts of mandatory reserves of banks within the country, and 28.69 percent was allocated to accounts at the CBCG abroad.

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The average balance of total bank deposits, which constitute the basis for calculating the mandatory reserve, was 5.32 billion EUR in December. Of the total deposit level, 83.83 percent pertains to demand deposits, and 16.17 percent pertains to time deposits.

Banks in Montenegro set aside the mandatory reserve based on the decision of the CBCG. This decision established a system for calculating the mandatory reserve by applying a rate of 5.5 percent to the portion of the base consisting of demand deposits and deposits contracted for a period of up to one year, and a rate of 4.5 percent to the portion of the base consisting of deposits contracted for a period exceeding one year.

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For deposits contracted for a period exceeding one year with a clause allowing early withdrawal within less than one year, a rate of 5.5 percent is applied.

Since January 2018, the base for calculating the mandatory reserve consists of time deposits and demand deposits, excluding those of central banks.

CBCG pays banks a monthly fee for 50 percent of the allocated mandatory reserve, calculated at the rate of €STR (Euro Short-Term Rate) reduced by ten basis points annually, provided that this rate cannot be lower than zero.

Banks can use up to 50 percent of the allocated mandatory reserve interest-free for maintaining daily liquidity, with the condition that the amount used must be returned on the same day.

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