In the Report, where the Standard & Poor's agency affirmed the country’s BB- credit rating, with a stable outlook, a special attention was paid to the monetary policy, focusing on the stability of the domestic currency and the level of foreign reserves, as well as the stability of the banking system. Among other things, the Report noted that the National Bank measures, such as the lower reserve requirement for the bank liabilities denominated in denars, led to a reduction of the total euroization in the country, and in the past years, deposits and loans denominated in foreign currency take 40% of the total deposits and loans. According to Standard & Poor's, this percentage is lower than in other economies in the region, which gives the National Bank additional space to act further through the monetary policy. The Standard and Poor's Report also separately mentions the growth of foreign reserves during 2018, largely reflecting the National Bank's interventions on the foreign exchange market.
An overview also of the banking system is given, emphasizing its good capitalization and profitability, as well as its funding mainly through domestic deposits. According to Standard & Poor's estimates, non-performing loans in the country account for around 5% of total loans, which, as noted in the Report, is extremely positive if compared with data for other countries in the region. The Agency also gives positive assessments of the credit growth in the country, indicating that there are positive movements, especially in the segment of corporate lending. Standard & Poor's expects that in the next few years, credit growth will amount to, on average, 7%, annually.
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