Total deposits held by commercial banks in Croatia have continued to increase, reaching 296.1 billion (€39.8 billion) at the end of October 2019, the central bank said.

Deposits grew by 280 million kuna, or 0.1%, compared to September 2019, and by 8.6 billion kuna, or 2.9%, from October 2018.

The year-on-year increase was the result of a continued rise of demand deposits, which include money in transaction accounts and banks’ obligations arising from kuna payment instruments issued.

Demand deposits reached 102.4 billion kuna in October, accounting for 35 percent of total deposits. They have continued their rise at two-digit rates, with minor departures, since 2015, increasing by 17.5 billion kuna or 20.7% since October 2018.

This is due to low interest rates on time deposits in a situation when there is a disinclination to invest in other forms of financial assets and when surpluses of disposable income, which are slowly growing with the economic recovery, are channelled into the most liquid forms of deposit, analysts at Raiffeisen Bank (RBA) said in their comment.

On the other hand, total savings and time deposits, both in the domestic and foreign currency, stagnated compared with September 2019 and continued to decline compared with October 2018. They reached 193.7 billion kuna at the end of October 2019, down by 4.4 percent year-on-year. Eighty percent of such deposits were foreign currency deposits, mostly those denominated in euro, and were mainly generated by the households sector.

(€1 = 7.44 kuna)