Monetary and credit policies in Kosovo

The economic system has been facing tough challenges worldwide in the last several years. In Kosovo, it seems like the monetary and credit system was untouched by the global financial crisis and the worldwide 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 interest rate on deposits is considered very low as compared to the interest rate on loans. Arguably, this has 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 immune to the global financial crisis.