"Exchange rate affected by consolidation of public finances"

"Exchange rate affected by consolidation of public finances"

“The fluctuations of the exchange rate, such as we have been experiencing recently, are common in the flexible exchange rates regime,” Tabaković said in a statement to Tanjug.

When it comes to influence of local factors, Tabaković said that it was linked to the pace of consolidation of public finances, but also increased demand for foreign exchange by companies operating in Serbia and paying dividends from profits being earned.

“We are doing everything we can to make our country an environment in which profits of those doing business here can become even greater, but we expect the earned money to be reinvested in Serbia and to help increase employment,” said the NBS governor.

Today, and for the first time this year, the exchange rate crossed the psychological threshold of RSD 117 for one euro, at RSD 117.0851. Three days ago, the official middle exchange rate stood at RSD 116.6988.

Since the beginning of the year, the NBS has bought EUR 200 million and sold EUR 870 million in the interbank foreign exchange market to prevent excessive daily fluctuations of the dinar.

The Serbian currency hit its historic low against the euro on July 30, 2012, when the official middle exchange rate stood at RSD 118.6892.