NBS introduces "inflation targeting"

The National Bank of Serbia (NBS) has announced that it will start applying the regime of inflation targeting this year.

Izvor: Beta

Monday, 05.01.2009.

11:26

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The National Bank of Serbia (NBS) has announced that it will start applying the regime of inflation targeting this year. This is a policy expressed with the index of retail prices, and is used in the EU. NBS introduces "inflation targeting" The NBS monetary policy program also says that the Serbian central bank will seek to keep inflation under ten percent by the end of 2009. The NBS has so far acted on base inflation projections, which did not include state-controlled prices, such as fuels and grains. In line with the new approach, the bank says the main monetary policy tool will be its reference interest rates. Serbia's November inflation was at 10.9 percent, according to the EU methodology. When it comes to the Serbian dinar, RSD, the NBS intends to continue with a "floating exchange rate" regime, and intervene in the market which forms it only if daily values fluctuate excessively, thus jeopardizing the financial and price stability. Another motive to intervene will be to "protect an adequate level of hard currency reserves". The central bank also stated that it will undertake measures under its jurisdiction to alleviate effects of the world financial and economic crisis and preserve the country's financial system in 2009.

NBS introduces "inflation targeting"

The NBS monetary policy program also says that the Serbian central bank will seek to keep inflation under ten percent by the end of 2009.

The NBS has so far acted on base inflation projections, which did not include state-controlled prices, such as fuels and grains.

In line with the new approach, the bank says the main monetary policy tool will be its reference interest rates.

Serbia's November inflation was at 10.9 percent, according to the EU methodology.

When it comes to the Serbian dinar, RSD, the NBS intends to continue with a "floating exchange rate" regime, and intervene in the market which forms it only if daily values fluctuate excessively, thus jeopardizing the financial and price stability.

Another motive to intervene will be to "protect an adequate level of hard currency reserves".

The central bank also stated that it will undertake measures under its jurisdiction to alleviate effects of the world financial and economic crisis and preserve the country's financial system in 2009.

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