Collateral for monetary operations and risk management

Type of securities

The NBS performs monetary operations against the collateral of dinar securities (not indexed to a foreign currency) issued by:

  • the National Bank of Serbia;
  • the Republic of Serbia;
  • an international financial organisation and development bank or a financial institution founded by a foreign government, with the credit rating of “AAA” by Standard & Poor’s or Fitch-IBCA , or “Aaa” by Moody’s;
  • company with a solvency rating of minimum “(D) Eligible solvency” as assigned by the Serbian Registers Agency or with other solvency/creditworthiness rating equivalent to “(D) Eligible solvency”.
  • Survey of issued NBS bills

Risk management

To ensure the collection of its receivables, the NBS may apply in its monetary operations an upward/downward haircut to the nominal value of securities subject to a repo transaction, and/or a downward haircut to the nominal value of securities against which banks are approved daily liquidity loans and/or short-term dinar loans.

The upward/downward haircut is determined according to the type of securities and their residual maturity taking into account the market price of securities, i.e. current market and monetary developments.

The downward/upward haircuts are set by the Decision on Determining Upward/Downward Haircut to the Nominal Value of Securities, and equal:

REPO SALE OF SECURITIES

Type of securities Residual maturity in days Upward haircut
NBS T-bills up to 371 0.00%

REPO PURCHASE OF SECURITIES
DAILY LIQUIDITY LOAN
SHORT-TERM DINAR LOAN

Type of securities Residual maturity in days Downward haircut
NBS T-bills up to 371 3.00%
Discount securities of the Republic of Serbia and international financial organisations and international development banks or financial institutions up to 371 3.00%
372–731 5.00%
Coupon securities of the Republic of Serbia and international financial organisations and international development banks or financial institutions up to 371 2.00%
372–731 2.00%
732–2.008 2.00%
over 2.008 2.00%
Bonds issued by domestic companies (corporate bonds) with the basic solvency scoring A (excellent solvency) or B (very good solvency) up to 1.830 5.00%
1,831–3,660 5.50%
Bonds issued by domestic companies (corporate bonds) with the basic solvency scoring C (good solvency) up to 1.830 6.00%
1,831–3,660 6.50%
Bonds issued by domestic companies (corporate bonds) with the basic solvency scoring D (acceptable solvency) up to 1.830 7.00%
1,831–3,660 8.00%