The share of household borrowing denominated in Serbia’s local currency reached a new high in June 2026, extending a broader shift toward dinar-based financing as credit growth accelerates. Household loan dinarisation rose to 56.9% in June 2026, up from 56.5% in March. The increase came as household credit continued expanding at an annual rate of around 20%.
Corporate borrowing remains considerably more oriented toward the euro, although its dinarisation ratio also increased during the period. The share of corporate loans denominated in dinars rose from 22.8% to 24.2%.
Dinar deposits also gain share
The move toward local-currency financing has also been reflected in deposits. The dinar portion of combined corporate and household deposits increased to 45.5%. The growing use of the local currency reduces the exposure created when borrowers receive income in dinars while servicing debt linked to the euro. Changes in the exchange rate can otherwise increase repayment obligations for borrowers whose earnings are not denominated in the currency of their debt.
Higher dinarisation therefore reduces the currency mismatch within household and corporate balance sheets that has historically represented a vulnerability for Serbia’s financial system.
Local-currency lending strengthens monetary policy transmission
The increasing share of dinar loans also changes the way domestic monetary policy affects financing conditions. A banking system heavily concentrated in euro-linked lending is more directly influenced by European interest rates and EURIBOR. A larger stock of dinar-denominated loans increases the direct influence of the National Bank of Serbia (NBS) on domestic borrowing conditions.
The shift has continued even though nominal borrowing costs for dinar loans remain higher. New household lending in dinars carried an average rate of approximately 8.5%, compared with 7.1% for corporate borrowers. The figures indicate that borrowers are increasingly taking local-currency loans despite the higher nominal cost, while the expansion of household credit continues at around 20% annually. The greater use of dinar financing limits the buildup of euro-related currency mismatches as lending volumes increase.
