At the end of June, the Central Bank of Montenegro (CBCG) reported that banks‘ mandatory reserve totaled EUR 287.64 million.
Of this amount, 71.03% of the mandatory reserve funds were held in domestic bank accounts, while the remaining 28.97% were held in accounts abroad with the CBCG.
In May, the average total deposits of banks, which serve as the basis for calculating the mandatory reserve, amounted to EUR 5.27 billion. Demand deposits accounted for 83.96% of the total deposit level, with time deposits making up the remaining 16.04%.
Montenegrin banks allocated the mandatory reserve based on the CBCG’s decision, which implements a system applying a 5.5% rate to demand deposits and deposits with maturities up to one year, and a 4.5% rate to deposits with maturities exceeding one year.
Deposits with maturities exceeding one year that include a clause allowing early withdrawal within one year are subject to a 5.5% rate.
Since January 2018, the base for calculating the mandatory reserve includes time deposits and demand deposits, excluding those held by central banks.
CBCG pays banks a monthly fee on 50% of the allocated mandatory reserve, calculated at the €STR (Euro Short-Term Rate) rate reduced annually by ten basis points, ensuring the rate does not drop below zero.
Banks can use up to 50% of the allocated mandatory reserve interest-free to maintain daily liquidity, provided the amount used is returned on the same day.
