RS does not give up on attacking the Central Bank, Dodik needs money

Representatives of Republika Srpska are persistent in their attempts to destabilize the Central Bank. At the request of representatives from RS, the Management Board of the Central Bank should once again discuss the reduction of mandatory reserves on all deposits. The reason, as stated by RS, is to ensure more money for the credit activity of banks in RS.

This would fulfill the wish of the SNSD leader, who has been publicly advocating this thesis for a long time, and his only goal is to try to secure new loans by pumping money into the banking system in RS, which is increasingly close to financial collapse under the leadership of his party.

The questionable nature of such requests becomes particularly evident when it is known that banking sector regulators already adopted a set of measures last year that freed up three billion KM for lending in the Federation of BiH alone.

Banking experts agree that this would be an extremely bad move that could destabilize the system and cause an additional shock to banks. They ironically tell us that this would make sense if the BiH economy grew by 15 percent annually for three consecutive years.

 

Central Bank Governor Senad Softić, in response to these requests from RS for RTRS, stated that a reduction in mandatory reserves is only possible when the surplus or a larger portion of money above mandatory reserves, which amounted to 2.7 billion at the middle of last year, with a surplus of 2.6 billion KM, is utilized.

"We have emphasized several times that, if the need arises, we are ready to react quickly and increase the liquidity of banks by lowering the mandatory reserve rate. However, for now, we do not see any need for such a thing," said Softić.

According to data from the Banking Agency of FBiH, the banking sector in this entity is stable, so it continues to hold funds higher than the prescribed reserves.

On the other hand, the banking sector in Republika Srpska is in a worse condition than that in the Federation of BiH, and the requests from this entity can also be interpreted as assistance to some endangered banks struggling with liquidity.