Savings rise despite the pandemic – dinar savings still more profitable than FX savings

That citizens increasingly trust our stable domestic financial system and a stable dinar is also confirmed by the fact that both dinar and FX savings continue up, reaching their record levels, in the year marked by heightened uncertainty and the global economic crisis caused by the COVID-19 pandemic.

According to the latest data, dinar savings stand at almost RSD 90.0 bn, which is over five times more compared to end-2012, since when they have been recording intensive growth. In the past eight years (since 2013), dinar savings have increased by around RSD 9.0 bn on average per year, which is six times more than in the 2002–2012 period (around RSD 1.5 bn). This shows clearly that long-term monetary and financial stability, ensured by the NBS for the ninth year in a row, provide security to citizens to save in the domestic currency without the fear that the real value of their deposits, i.e. earnings on dinar savings will decline.

Dinar savings increased by RSD 18.5 bn (around 30%) last year, and by RSD 10.0 bn (almost 13%) this year. It should be highlighted that in the past year (since October last year), domestic currency savings were up by around 20%. The average annual growth has been 25% since 2013, which means that dinar savings have been rising fast, by a fourth on average each year, in the past eight years.
Household FX savings have also been going up, though more moderately. According to the latest data, they reached EUR 11.2 bn and, after rising by EUR 0.8 bn in 2019, they are up by EUR 0.4 bn (3.7%) this year.

The current crisis has reminded us again of how important it is to save continuously. Now, perhaps more than ever before, dinar savings have become exceptionally important. And as we are approaching the World Savings Day (31 October), this is the right moment to underscore the significance of savings, both for individuals and the economy as a whole.

During the coronavirus-induced global crisis, Serbia managed to preserve macroeconomic and financial stability owing to the robust package of monetary and fiscal measures, and the fact that it faced the crisis boasting a solid macroeconomic position built in the past years. Responsible economic policy in the past eight years resulted in low and stable inflation – for the seventh year in a row (around 2% on average), a relatively stable dinar exchange rate against the euro, high FX reserves (EUR 13.0 bn in September), a sharp reduction in the NPL ratio (3.4% in September) and ordered public finances. This created room to adopt a comprehensive package of measures to overcome the negative consequences of the pandemic.

As the measures were adopted in a timely fashion, citizens’ confidence in the domestic financial system was preserved, as also confirmed by the fact that dinar and FX savings, despite the economic crisis and the coronavirus-induced pandemic, continue to rise, constantly reaching new record levels.

As in the past eight years ahead of the World Savings Day, this year as well the NBS has prepared the analysis of the profitability of savings, which has confirmed once again that it pays off more to save in dinars than in FX – both in the short and long run. This is the result of:

  • preserved monetary (inflation and the exchange rate) and financial stability
  • relatively higher interest rates on dinar than on euro savings
  • more favourable tax treatment of dinar savings – interest on dinar savings is not subject to taxes, while interest on FX savings is subject to a 15% tax rate and
  • the measures adopted during the pandemic which helped preserve macroeconomic stability.

A person who deposited RSD 100,000 one year ago would receive around RSD 2,200 (or close to EUR 20) more compared to a depositor placing RSD 100,000 in the euro equivalent – EUR 850 in the same period (Table 1).

The analysis has confirmed that it pays off more to save in dinars than in FX, not only over one year, but also on shorter and longer terms. In the past eight years, in case of deposits placed over three months, dinar savings have been more profitable than euro savings in almost 90% of the observed three-month sub-periods. When deposits are placed over two years, dinar savings are more profitable than euro savings in all observed two-year sub-periods.

By promoting dinar savings and their higher profitability, the NBS continues with its practice of encouraging the process of dinarisation. In cooperation with the Government, it will continue to undertake measures and activities aimed at achieving this objective.


Governor’s Office