Jelašić: NBS will halt inflation

Radovan Jelašić says that he is certain that the central bank will be able to stop inflation.

Izvor: B92

Friday, 14.03.2008.

10:05

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Radovan Jelasic says that he is certain that the central bank will be able to stop inflation. With this in mind, the National Bank of Serbia (NBS) has increased the key policy rate to 14.5 percent. Jelasic: NBS will halt inflation “We will go further, until we are completely sure that the base rate of inflation will be between three and six percent at the end of the year. We have the right and obligation to use all methods, instruments in order to achieve price stability and this is just one of the first measures,” the NBS governor told Radio Television Serbia. Some economists believe that the increase in the key policy rate is a predictable move for the NBS to make. Editor-in-Chief of Bankar magazine Milan Culibrk said that the NBS had to react in this instance with restrictive measures. “After two unsuccessful attempts to calm the pressure on prices and the exchange rate through slight increases of the key policy rate, the NBS was forced to take drastic measures yesterday and increase that interest rate by as much as three percent, which has not happened in the last decade,” he said. The NBS confirmed that political instability in the country had reflected on the economy as well, adding that a lack of participation on the market by foreign investors was already apparent. In addition to the increase in crude oil prices, inflatory pressure on the dinar is expected to continue during the election campaign. Radovan Jelasic (FoNet archive)

Jelašić: NBS will halt inflation

“We will go further, until we are completely sure that the base rate of inflation will be between three and six percent at the end of the year. We have the right and obligation to use all methods, instruments in order to achieve price stability and this is just one of the first measures,” the NBS governor told Radio Television Serbia.

Some economists believe that the increase in the key policy rate is a predictable move for the NBS to make.

Editor-in-Chief of Bankar magazine Milan Ćulibrk said that the NBS had to react in this instance with restrictive measures.

“After two unsuccessful attempts to calm the pressure on prices and the exchange rate through slight increases of the key policy rate, the NBS was forced to take drastic measures yesterday and increase that interest rate by as much as three percent, which has not happened in the last decade,” he said.

The NBS confirmed that political instability in the country had reflected on the economy as well, adding that a lack of participation on the market by foreign investors was already apparent.

In addition to the increase in crude oil prices, inflatory pressure on the dinar is expected to continue during the election campaign.

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