Monetary and Credit Policies in Kosovo

Abstract

The economic system has been facing tough challenges worlddwide in the last several years. In Kosovo, it seems like the monetary and credit system was untouchhed by the global financial crisis and the woorldwide lost of confidence. Monetary policy in Kosovo has its own characteristics in the post- war period, because after war as it is known Kosovo became part of the Euro Zone. The CBK estimates that the banking sector stands well as regards to capital and especially bad credits. Still, the interesst rate on deposits is considered very low as compared to the interest rate on loans. Arguably, this haas an important impact on investments and in economic growth also. Furthermore, the lack of a strong competition has its share at the pie of this problem, mentioning the fact that all of the banks have some unused capacity of crediting as they remain over-liquid. At the end we conclude that the monetary and credit system faces many challenges and as such it has its own issues although it seems immunne to the global financial crisis.