3 interest rates in the primary market of government securities ( p. a., in % ) beonia key policy rate interest rate belibor 1w interest rate on deposit facility interest rate on lending facility 1 5 1 5 1 5 sources : thomson reuters and nbs. 2y * 7y 10y 3y 6m 1 5 12m 5y 3m 1 5 1 5 1 5 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 source : ministry of finance. * excluding coupon securities with the rate linked to the nbs key policy rate. lowering of the key policy rate expectedly reflected on a further drop in interest rates in the interbank money market and lower government costs in respect of issued dinar securities. to be specific, the achieved interest rates at the last three auctions of dinar securities with seven -, twoand three - year maturity were lower by 0. 5 to 0. 6 percentage points relative to the previous auctions with the same maturity, which corresponds to the lowering of the key policy rate. hence, the full coordination of fiscal and monetary policy continues. acceleration of credit activity as support to economic activity and a decrease in the npl ratio to its lowest level in the past nine years past monetary policy easing, a fall in the country risk premium, increased interbank competition, economic growth and labour market recovery, as well as low interest rates in the euro area, contributed to credit activity acceleration to 5 % year - on - year in september. excluding the effect of npl write - offs, the recovery of credit activity is even more evident and equalled 9. 8 % year - on - year. chart 4 effect of npl write - offs on lending growth chart 5 npl share in total loans, gross principle ( y - o - y growth rates at the programme exchange rate, in % ) ( in % ) - 5 - 10 - 15 total domestic loans corporates * households * total domestic loans * households corporates 1 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9 source : nbs. * excluding the effect of npl write - offs over the last year. total corporate sector household sector i iii i iii i iii i iii i iii i iii i iii i iii source : n

doubt, has provided critical support to the country ’ s economic recovery. as a result, interest rates on dinar loans to corporates and households dropped by more than 10 percentage points. we find it encouraging that the number of your questions about dinarisation is increasing because this means that you too recognise that dinarisation is gradually and unquestionably growing in the household sector. dinar savings have risen almost threefold since end - 2012, which we interpret as growth of confidence in the domestic currency, as well as in the activities of the nbs. when compared to savings in foreign currencies, savings in dinars do not measure up, but they are constantly increasing. in the first half of the year, 75 % of new loans to households were denominated in dinars. we are pleased to see that the results achieved by the national bank of serbia – such as low inflation, relative stability of the exchange rate and halved interest rates in the dinar market – are encouraging both household saving and borrowing in dinars. aware of how deep the roots of euroisation are, it was clear to us that the process of dinarisation would be a long one, and yet we decided to go ahead with it. it is equally important that the household sector is not the only one to record an upturn in lending – overall lending activity has been on the mend since the second half of 2015, and in june domestic lending to corporates and households recorded growth of 3. 5 % year - on - year. chart 5 interest rates on dinar corporate and household chart 6 dinarisation of household loans and a rise in ( weighted average values, p. a., in % ) ( rsd bln ) loans * dinar savings ( in % ) 10. 5 6. 6 new dinar household loans new dinar corporate loans 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 source : nbs. * excluding revolving loans, current account overdrafts and credit card debt. share of dinar in bank receivables from household sector ( rhs ) dinar savings ( lhs ) 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 source : nbs. bis central bankers ’ speeches i have been serving as governor during a period marked by anything but certain