Respiration monitoring of patients with chronic diseases, children, elderly, or sportsmen can be a useful tool in health condition assessment, early diagnosis of various diseases, and real-time prediction of possibly dangerous health conditions. In this paper we present a low-cost solution of respiration monitoring system, based on a custom designed capacitive sensor, which comprises of two moveable electrodes, mounted on a rigid belt attached around the person's chest. One electrode is fixed while the other one moves in a rhythm of breathing, with restriction of movement in one axis only. The electrode geometry was optimized by numeric electromagnetic simulations to provide linearity and measurable level in change of capacitance, even for case of shallow breathing. Input measuring chain is based on capacitance-to-digital (CDC) integrated circuit and it is able to capture the changes of up to several hundreds of femtofarads in full scale, with enough resolution to enable breathing rate detection, and discrimination of cases of deep, shallow, and no breathing by signal processing algorithms. The prototype measurement system was designed and tested in laboratory on several test subjects. Preliminary experiments showed that the proposed measurement system for respiration monitoring can be used for low-cost and low-power integrated solution for continuous monitoring of patient's respiration.