NBS results in 2023

  • Inflation was put on a sustainable downward path and it will close the year at half the level from end-2022.
  • The relative stability of the dinar against the euro was maintained in 2023 as well – the dinar gained 0.1% on the euro in nominal terms and the NBS net bought a record high amount of foreign currency – EUR 3.7 bn (concluding with 27 December) on account of interventions in the FX market.
  • The year 2023 is the sixth of the past seven years (from 2017 onwards) in which the NBS was a net FX buyer – in the total amount of EUR 8.9 bn (concluding with 27 December).
  • Gross FX reserves are at their record highs, measuring more than EUR 24.5 bn.
  • Gold as part of FX reserves was boosted further in 2023 – by more than 1 tonne, to the record high level of almost 40 tonnes.
  • In 2023, dinar savings reached and then exceeded the equivalent value of EUR 1 bn, posting the most dynamic annual growth so far.
  • FDI inflows are set to exceed the projected figure and remain close to the record level from 2022.
  • Aiming to preserve financial system stability and protect financial services consumers, we adopted measures temporarily capping interest rates on housing loans.
  • The NBS’s supervisory activities generated a material effect of RSD 3.1 bn for financial services consumers, while in individual procedures under complaints it amounted to around RSD 34 mn, and in mediation procedures to RSD 5.2 mn.
  • Despite headwinds from the international environment, rating agencies kept Serbia’s rating unchanged, with a stable outlook. Standard & Poor’s and Fitch have kept Serbia’s rating at a notch from investment grade.

“Behind us is another year riddled with challenges. Our key task was combating inflation, which posed a challenge at a global level. We succeeded in establishing a strong downward trajectory and halving inflation, which we achieved by gradual and well-calibrated monetary policy tightening, taking care not to jeopardise financial stability, as well as to ensure continued GDP growth. By maintaining the stability of the dinar exchange rate, we limited the spillover of import price growth onto domestic prices, thus contributing to overall macroeconomic stability. The stability of the local currency has been a trademark of the National Bank of Serbia for more than a decade. Going forward, all of our efforts will be focused on preserving stability – by resorting to all measures in our competence, to help ease the business conditions for corporates, create more jobs and enable a better life for all of our citizens,“ Governor Jorgovanka Tabaković noted.

Establishing a sustainable downward trajectory for inflation

  • Since April, y-o-y inflation has been on a sharp downward path, coming down to 8% in November, thanks to a significant slowdown in food price growth, as well as in core inflation.
  • Also constantly declining is core inflation, which has trended below headline inflation all along, slowing down to 7% y-o-y in November mainly under the impact of monetary policy measures.
  • Inflation is expected to remain on the downward path in the coming period, returning within the target tolerance band in mid-2024 and coming close to the 3% target at the end of the year.

We maintained the relative EUR/RSD exchange rate stability 

  • We maintained the relative EUR/RSD exchange rate stability in 2023, responding to the most intense pressures on the supply side so far, in order to prevent excessive appreciation of the dinar against the euro.
  • The dinar gained 0.1% nominally against the euro, and the NBS intervened in the FX market by net buying a record high amount of foreign currency – EUR 3.7 bn (concluding with 27 December).
  • The year 2023 is the sixth of the past seven years (since 2017) in which the NBS was a net FX buyer – EUR 8.9 bn in total (concluding with 27 December).

FX and gold reserves touched new record highs

  • Gross FX reserves are at their historical highs of over EUR 24.5 bn. In 2023, gross FX reserves increased by over one quarter, or by over EUR 5 bn, and it was largely the soundest growth – based on the net purchase of foreign currency in the local interbank FX market.
  • We continued increasing gold in FX reserves in 2023 – by more than one tonne from domestic production to the record level of close to 40 tonnes, worth EUR 2.4 bn and accounting for around 10% of FX reserves.
  • In 2023, dinar savings reached and then exceeded the equivalent value of EUR 1 bn, posting the most dynamic annual growth so far (since 2001 i.e. since data are monitored). Namely, dinar savings increased by over RSD 38 bn (by 40%) from end-2022, to the record high levels of almost RSD 135 bn.


FDI will outperform the projections this year again

  • Thanks to the preserved macroeconomic and financial stability and a favourable growth outlook, Serbia has seen a continued high FDI inflow, amounting to EUR 4.2 bn during eleven months and bound to come close to the 2022 record.
  • Continued high FDI inflow propels productivity, employment and competitiveness of our economy, affirming Serbia as an attractive investment destination. In 2023, private sector employment rose by around 50 thousand on average, reaching the record high of 1.75 million people.

Maintenance of credit rating at a notch away from investment grade

  • Evidencing a positive perception of Serbia as an investment destination is the fact that in 2023 rating agencies Standard & Poor’s, Fitch and Мооdy’s kept Serbia’s credit rating unchanged, with a stable outlook. According to Standard & Poor’s and Fitch, Serbia’s rating is a notch away from investment grade.
  • Agencies point out that despite headwinds from the international environment, the important factors behind the kept stable outlook were the credible monetary policy framework, the preserved financial stability and a record-high level of FX reserves.
  • Excellent results under the economic programme with the International Monetary Fund allowed for the stand-by arrangement to be treated as precautionary one review earlier than planned.

We strengthened financial stability and facilitated loan repayment

  • In 2023 as well, the banking sector maintained high capital adequacy (CAR of 22.21%), with favourable capital composition (highest quality Common Equity Tier 1 capital accounting for over 92%).
  • All relevant indicators of banking sector liquidity were maintained at values two times higher than the regulatory minimums.
  • Banking sector consolidation successfully continued, reinforcing financial stability, while the quality and scope of services provided to households and corporates were additionally upgraded.   
  • To preserve financial system stability and protect financial services consumers, we adopted measures temporarily capping housing loan interest rates. These measures include a temporary cap on the growth or a reduction of the agreed variable nominal interest rate, a rate cap for housing loans approved during the application of these measures, and the possibility of early repayment of housing loans with no early repayment charge. 
  • Almost 3,000 natural person borrowers used RSD 2.7 bn worth of repayment facility to reschedule their cash, consumer and similar loans at repayment terms three years beyond the regular regime, whereby we helped reduce the burden on their budgets.
  • More than 6,000 credit accounts (RSD 24.2 bn) of agricultural loans were rescheduled, including loans to entities buying and cold storing fruit.
  • A temporary measure of approving consumer loans of up to RSD 90,000 at under-two-year repayment term to natural persons was prolonged, allowing for a quick, efficient and simple credit procedure to remain in place.  

We have continuously upgraded financial consumer protection

In 2023 as well, we continued to take activities aimed at protecting financial consumers. We responded to consumers’ complaints and conducted supervision procedures in respect of banks.

  • By 10 December 2023, the NBS resolved 1,835 consumer complaints, the bulk of which referred to banks (62%). Of the 1,132 resolved consumer complaints against banks, more than a third were founded, i.e. 34.4% of complaints were resolved in favour of bank clients.
  • The financial effect for consumers through complaint procedures amounted to around RSD 34 mn, while the effect achieved through mediation procedures was RSD 5.2 mn.
  • Much greater effects were achieved through supervision procedures as, once an irregularity has been detected, banks are ordered to remove this irregularity in relation to all other clients affected. The financial effect for consumers achieved through supervision procedures this year amounts to RSD 317.3 mn.
  • Moreover, an additional effect of RSD 2.2 bn was achieved this year based on a single supervisory activity which covered all banks. This is the total amount of consumers’ debt written off and deleted from the Credit Bureau base this year.
  • Additionally, based on the NBS’s activities taken in 2019 and 2021, many loan beneficiaries who decided on early repayment saw some reduction of their outstanding debt. According to data and estimates, this amounts to around EUR 5 mn per annum at banking sector level, but this amount might have been even higher last and this year because the amount of early loan repayment went up.
  • Thanks to the NBS’s activities, a direct financial effect of around RSD 200 mn was recorded for insurance consumers in the past period through supervision procedures, with a significant amount of reserved funds in order to indemnify a larger number of citizens.

We continued to introduce innovations

  • Over 65 mn transactions were executed in the NBS Instant Payments System (concluding with 25 December 2023), which is an increase by 25% relative to the same period of 2022.
  • Two more banks introduced the “Transfer” service as an additional functionality in their m-banking applications, so that nine banks allow for this service at end-2023.
  • Five banks enabled the issuance of a payment instrument for instant payments at points-of-sale within new applications to their clients – citizens, and five banks enabled the payment of bills/invoices by scanning the NBS IPS QR code. Moreover, 13 solutions of banks were assessed as ready for the acceptance of instant payments at physical and online points-of-sale.
  • By intensifying regional cooperation with other central banks, activities aimed at developing cross-border payments in the region continued – in 2023 we established direct payment transactions between Serbia and Montenegro. Banka Poštanska štedionica AD Banja Luka from Bosnia and Herzegovina and Universal Capital Bank AD Podgorica – the first bank from Montenegro joined the NBS International Clearing of FX Payments, enabling their clients faster and simpler execution of FX transactions towards participants in the system.
  • In 2023, activities relating to the introduction of contactless technology in the DinaCard system were carried out and intensive testing on the issuing and acceptance side is underway.
  • We continued to implement activities relating to the issuance of DinaCard–UnionPay cards, used both in the domestic acquiring network and the international UnionPay network. Banka Poštanska štedionica was the first bank to start issuing these cards.
  • Further steps were taken to enable the acceptance of Discover cards in the DinaCard acquiring network. Implementation and certification testing on the system are underway. Banka Poštanska štedionica will be the first to enable acceptance in its network.
  • The market of payment services was further enhanced. These services are provided by twenty banks, nine payment institutions and six e-money institutions (in 2023 three payment institutions were licensed to issue e-money – in addition to providing existing and new payment services). Of this, eight payment institutions, four e-money institutions and one public postal operator provided payment services through an extensive network of agents.

Digitalisation of bills of exchange

We stepped up the activities on the project to introduce electronic bills of exchange. In the course of next year, they will be fully introduced in everyday business activities, significantly reducing costs for citizens and corporates.

Digital assets market

After the first licences to provide virtual currency services were issued in December 2022, in 2023 we continued to conduct off-site supervision and initiated on-site supervision over service providers. We kept a close eye on legal persons, entrepreneurs and natural persons suspected of being engaged in unauthorised provision of virtual currency services and we undertook relevant measures in accordance with the Law on Digital Assets.

Supervision of exchange operations

We temporarily revoked the authorisations to perform exchange operations from 26 exchange dealers that no longer met the conditions for the performance of exchange operations envisaged by law and/or NBS regulations, and/or acted contrary to them.

Governor`s Office