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Monetary Policy | Monetary Policy Instruments | Daily Liquidity Credit Against a Collateral of Securities

Daily Liquidity Credit Against a Collateral of Securities

The NBS extends daily liquidity loans against the collateral of eligible dinar securities (not indexed to a foreign currency), based on a concluded liquidity loan agreement and the bank’s loan request.

Liquidity loans are extended to banks against the collateral of dinar securities 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.

Banks may use: 

  1. daylight liquidity loans (intraday loans), i.e. loans repaid to the NBS on the same business day. Banks pay no interest on the amount of used and repaid daylight loan;
  2. overnight liquidity loans (overnight loans), i.e. loans that are not repaid to the NBS on the same business day. On this type of loans, the NBS charges interest equal to the key policy rate plus 1.25 percentage points. Banks are required to repay overnight liquidity loans and the appertaining interest by 11 am on the following business day.

If the bank fails to settle its liabilities within the envisaged timeframe, the NBS will collect the outstanding amount of liquidity loan and the default interest by selling the securities placed as collateral. By way of exception, the NBS may also collect due but uncollected regular interest from the amount obtained through the sale of collateral securities, if it fails to collect such interest on the promissory notes.

 

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