The regulatory measures should be used to restrict the most vulnerable segments from FX risk exposure, and to ensure that a banking model based on a blunt pass-on of exchange rate risk to clients is not viable. The NBS has been making regulatory changes gradually always careful that potential side effects do not jeopardize the still fragile economic recovery.
We reduced dinar reserve requirement to 5% from 10%, with 2.5% remuneration. We have also amended the prudential debt service-to-income ratios to differentiate by currency matching with borrower income. Also, the compulsory deposit for loans taken in dinars has been abolished, whereas for loans indexed to foreign currency it is still 30%.