Serbian currency continues to slide against euro

A Serbian economist recently predicted that the Euro versus dinar exchange rate by the end of the year would be 135 to 1. If the dinar continues to slide at the rate it is currently, I think it may even surpass that. And what does Belgrade do to alleviate the dinar's demise, they bicker about who will get a seat in government to place their ample asses in? But we (Serbian citizens) have been promised change, so we have nothing to worry about, right?

"You need some economics lessons, if anything the value of a currency going down can stimulate growth through other countries buying Serbian goods as they become cheaper. "
(bganon, 15 June 2012 15:35)

Yes, but on the other the imports - payed in hard currency - are getting more and more expensive. Since Serbia has a trade deficit, i.e. consuming more than producing, this could be a problem.

KOSO the value of a currency going down doesn't cause a recession. You need some economics lessons, if anything the value of a currency going down can stimulate growth through other countries buying Serbian goods as they become cheaper.

If I were you, I'd be hoping that the Serbian currency gets stronger and stronger.

Comm. Parrisson imports being more expensive usually means that less imports are made. Thats why a cheaper valued currency helps both ways - increasing exports and reducing imports.

The problem with imports is when for some reason demand is inelastic ie demand stays the same as there is no alternative to imported goods for example. Most commonly however, this is not the case.

But as we know Serbia does import large amounts of energy from Russia and I would agree that it seems unlikely that alternative sources of energy will be found.

A weakening of the dinar overall is desirable for the Serbian economy. What I expect / would like to see over the next week or so is a new government formed and a stabilisation of the dinar between 120-125 for a Euro. Although the Euro is hardly a stable currency itself at the moment...

Come on 120 you're so close.....A recession is in sight. Let's do it rsd, you can do it.

Sincerely,

KOSO the value of a currency going down doesn't cause a recession. You need some economics lessons, if anything the value of a currency going down can stimulate growth through other countries buying Serbian goods as they become cheaper.

If I were you, I'd be hoping that the Serbian currency gets stronger and stronger.

Comm. Parrisson imports being more expensive usually means that less imports are made. Thats why a cheaper valued currency helps both ways - increasing exports and reducing imports.

The problem with imports is when for some reason demand is inelastic ie demand stays the same as there is no alternative to imported goods for example. Most commonly however, this is not the case.

But as we know Serbia does import large amounts of energy from Russia and I would agree that it seems unlikely that alternative sources of energy will be found.

A weakening of the dinar overall is desirable for the Serbian economy. What I expect / would like to see over the next week or so is a new government formed and a stabilisation of the dinar between 120-125 for a Euro. Although the Euro is hardly a stable currency itself at the moment...

Come on 120 you're so close.....A recession is in sight. Let's do it rsd, you can do it.

Sincerely,

A Serbian economist recently predicted that the Euro versus dinar exchange rate by the end of the year would be 135 to 1. If the dinar continues to slide at the rate it is currently, I think it may even surpass that. And what does Belgrade do to alleviate the dinar's demise, they bicker about who will get a seat in government to place their ample asses in? But we (Serbian citizens) have been promised change, so we have nothing to worry about, right?

"You need some economics lessons, if anything the value of a currency going down can stimulate growth through other countries buying Serbian goods as they become cheaper. "
(bganon, 15 June 2012 15:35)

Yes, but on the other the imports - payed in hard currency - are getting more and more expensive. Since Serbia has a trade deficit, i.e. consuming more than producing, this could be a problem.