"Macroeconomic instability causes weaker currency"

"Macroeconomic instability causes weaker currency"

IZIT's Saša Đogović said that the exchange rate is going through a stage of more intense depreciation compared to the previous year, which is a result of exceptionally weak production and exports of the Serbian economy.

"If the economic activity was stronger, the psychological effects of either the announced early parliamentary elections or any other event would not be able to cause a continued depreciation of the national currency," Đogović said.

The dinar is weak due to macroeconomic instability, he said.

"The country's credit rating has been reduced and there is a lot of confusion and obvious delays in the implementation of economic reforms which leads to a reduced interest of investors in the financial market and lower demand for the national currency and its consequent depreciation," Đogović noted.

In 2013, a considerable inflation drop was recorded "thanks to sheer luck rather than reforms," according to this expert.

The inflationary virus has only temporarily been appeased and put to sleep but it has not been eradicated from the Serbian economy, Đogović said.

In its publication, IZIT points to "a real danger on the Serbian market concerning sudden drop in the national currency's value as the current exchange rate is to the greatest extent based on the announced reforms and security speculations on the financial market."