The Central Bank of the Republic of Kosovo welcomed the estimates of the International Monetary Fund following the conclusion of consultations on Article IV with Kosovo for 2021.
The International Monetary Fund estimated that the Decision of the CBK to gradually unwind the pandemic-related support measures in 2021 was warranted.
While the financial system has remained resilient overall and the increase in non-performing loans is expected to be limited, strengthening credit risk monitoring is essential to ensure that bank-by-bank provisioning reflects the underlying change in asset quality and that capital buffers are sufficient to absorb write-downs and keep the flow of the credit. The supervisor authority’s capacity to evaluate the expected credit losses framework of regulated entities in the context of IFRS-9 implementation needs to continue improving.
The resume of CBK Board operation will enable the implementation of recommendations deriving from the Financial Stability Sector Review and Safeguard Assessment, ensuring that the financial stability function reports directly to the Executive Board.
Full report of the International Monetary Fund is available in the following link: