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Assesment of the Interest Rates in the Serbian Banking Sector


  • Lidija Barjaktarović

    () (University Singidunum, Belgrade, Serbia)

  • Maja Dimić

    () (University Union Nikola Tesla, Sremski Karlovci, Serbia)

  • Dejan Ječmenica

    () (Wiener Städtische, Vienna Insurance Group, Belgrade, Serbia)


Lending interest rates (IR) in the Serbian market are generally viewed as high. In accordance with the official NBS (National bank of Serbia) data for 2010: lending (IR) was 10.4% p.a., deposit IR was 4.2% p.a., and spread was 6.3% p.a. At the same time, IR on cross-border loans was 3.7% p.a. It means that the use of cross-border loans was a better solution for companies which were in position to take them. The indicator of IR spread in Serbia got worse and came down to 106th position (it used to be ranked 90th in 2009; WEF). If we analyse the structure of IR spread, we can notice that there is room for decreasing the level of active IR in the area of country risk premium and funding spread. Pearson Correlation shows that IR has strong relation with return on assets and volume of collected deposits i.e. profit margin per product.

Suggested Citation

  • Lidija Barjaktarović & Maja Dimić & Dejan Ječmenica, 2014. "Assesment of the Interest Rates in the Serbian Banking Sector," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 3(2), pages 21-35.
  • Handle: RePEc:cbk:journl:v:3:y:2014:i:2:p:21-35

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    References listed on IDEAS

    1. Kashyap, Anil K. & Stein, Jeremy C., 1995. "The impact of monetary policy on bank balance sheets," Carnegie-Rochester Conference Series on Public Policy, Elsevier, pages 151-195.
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    6. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, January.
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    8. Cargill, Thomas F. & Mayer, Thomas, 2006. "The Effect of Changes in Reserve Requirements During the 1930s: The Evidence from Nonmember Banks," The Journal of Economic History, Cambridge University Press, vol. 66(02), pages 417-432, June.
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    More about this item


    banking sector; interest rates; base part; margin; credit rating; standard risk cost; country risk;

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages


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