IMF Executive Board concludes Fourth Review of SBA and RSF Arrangements: CBK commended for advancing institutional reforms, developing the financial sector, and strengthening resilience

The Executive Board of the International Monetary Fund (IMF) has approved the Fourth Review of Kosovo’s Stand-By Arrangement (SBA) and Resilience and Sustainability Facility (RSF), concluding that the objectives of both programs have been successfully met, based on the strong performance demonstrated and assessed.

According to the IMF press release, the Central Bank of the Republic of Kosovo (CBK) is steadfastly leading the implementation of significant reforms aimed at enhancing governance and institutional quality, further developing the financial sector, and strengthening the country’s economic resilience.

The report published by the IMF highlights that the CBK has made important progress in enhancing the resilience of the financial system. The CBK has revised the Rules of Procedure of its Board, implemented an internal reorganization, adopted a three-year plan for implementing the Supervisory Review and Evaluation Process (SREP) to improve banking supervision, and enhanced credit registry data reporting requirements. Furthermore, the Law on Banks, adopted by the Assembly of the Republic of Kosovo in December 2024 but subsequently subject to review by the Constitutional Court, will support improvements in licensing standards and corporate governance, strengthen CBK’s supervisory powers, and enhance the resolution framework for banks in distress.

The report emphasizes that the ongoing reforms will help to strengthen financial regulation and supervision, systemic risk oversight, crisis preparedness, and the financial safety net to safeguard financial stability.

The banking sector continues to grow rapidly, providing essential support to economic activity while maintaining high levels of capitalization, liquidity, and profitability. Banks are on track to meet new capital regulatory requirements following the adoption of macroprudential measures in September 2024. These tools help build protective buffers, including through increased capital or the issuance of subordinated debt, according to the IMF report.

The Central Bank of the Republic of Kosovo has also made significant strides toward integration with the Single Euro Payments Area (SEPA) and the development of the regional instant payments system (TIPS Clone). Moreover, the IMF has positively assessed recent initiatives, including the introduction of Payment Account with basic features (free of charge)- and an online platform for comparing financial products, which have delivered tangible benefits to consumers by enhancing competition and financial literacy.

The CBK extends its gratitude to the IMF for the continued cooperation and strategic partnership and remains committed to its role as a guarantor of financial stability and a driver of sustainable economic development.

IMF Press Release 🔗 https://www.imf.org/en/News/Articles/2025/05/19/pr25154-kosovo-imf-concludes-4th-review-of-kosovos-stand-by-and-rsf-arrangements/

Full IMF Report 🔗 https://www.imf.org/en/Publications/CR/Issues/2025/05/21/Republic-of-Kosovo-Fourth-Reviews-Under-the-Stand-By-Arrangement-and-the-Arrangement-Under-567057/