The Central Bank of Montenegro has announced that mandatory reserves held by commercial banks reached €327.8 million at the close of December 2025. This figure highlights the ongoing stability within the country’s banking sector, as mandatory reserves are essential for liquidity management and overall financial stability.
Reserve requirements are determined by banks’ deposit liabilities. For demand deposits and those with maturities of up to one year, a reserve rate of 5.5 percent is applied, while deposits with maturities exceeding one year are subject to a 4.5 percent rate. Additionally, certain deposits that allow for early withdrawal are categorized under the higher rate due to their increased liquidity risk. This tiered structure is intended to align reserve obligations with the varying risk profiles associated with different funding sources.
Approximately 74.6 percent of the total mandatory reserves, or around €244 million, were maintained in reserve accounts within Montenegro, while the remaining 25.4 percent was held in foreign accounts. The calculation basis for these reserves was derived from an average total of €6 billion in bank deposits during November 2025, with demand deposits comprising the largest portion. This indicates a robust liquidity position on the liability side of banks’ balance sheets.
The reserve framework offers limited flexibility for daily liquidity management. Banks can utilize up to 50 percent of their mandatory reserves during business hours without incurring interest charges, provided that the withdrawn amount is fully restored by day’s end. This provision enables banks to address short-term liquidity demands while adhering to regulatory standards.
The current level and distribution of mandatory reserves reflect a stable banking environment bolstered by solid deposit growth and effective regulatory oversight. The reserve system serves as a crucial mechanism through which the Central Bank of Montenegro fosters confidence in the financial system and mitigates liquidity risks, all while allowing normal banking operations to proceed unimpeded.
