IMF: Changes to law on central bank "could affect program"

BELGRADE IMF Director for Europe Reza Moghadam said on Thursday the amendments to the law on the NBS could affect significantly Serbia's macroeconomic stability. This also applies to the program with the IMF, according to reports. IMF: Changes to law on central bank "could affect program" The adoption of these amendments would create insecurity, damage policy credibility and impose questions about the correctness of the macroeconomic policies," Moghadam stated in a letter to NBS Governor Dejan Soskic on August 1, which was presented to the media. Soskic in the meantime submitted his resignation, as the Serbian parliament started discussing the draft amendments, meant to pave the way for his sacking.. The changes that call for discharging the present governor, vice governor and members of the Council while ignoring the procedures laid down in the current law on the NBS are a serious violation of the central bank's independence, the IMF official's letter says. The amendment that allows the NBS to buy securities issued by the government and other public bodies on the secondary market enables indirect funding of the public sector, which is a serious risk for the NBS foreign exchange reserve and the dinar's value against foreign currencies, Moghadam pointed out. The adoption of these amendments would create insecurity, damage policy credibility and impose questions about the correctness of the macroeconomic policies, she remarked. "Existing arrangement with IMF is dead" Earlier in the day, Serbian Minister of Economy and Finance Mladjan Dinkic sais that representatives of the International Monetary Fund (IMF) were invited to come to Serbia, adding that they would have to talk about an entirely new arrangement for the existing program was "dead". "We will talk with the IMF mission, which is officially invited to come when they want, on a new program that will be in the interest of Serbia, and that will be realized," Dinkic told reporters at the Palace of Serbia on Thursday. According to preliminary talks with IMF representatives, the existing program was "dead" and a new one should be made, Dinkic said. Therefore we should not expect the program that was formally signed last year to be continued, because it is not realistic, Dinkic said. Head of the IMF office in Serbia Bogdan Lissovolik said earlier that the IMF mission is willing to come at an invitation from the Serbian government and continue negotiations, and that the starting point for the talks should be the latest economic, fiscal and other events and data. Tanjug

IMF: Changes to law on central bank "could affect program"

The adoption of these amendments would create insecurity, damage policy credibility and impose questions about the correctness of the macroeconomic policies," Moghadam stated in a letter to NBS Governor Dejan Šoškić on August 1, which was presented to the media.

Šoškić in the meantime submitted his resignation, as the Serbian parliament started discussing the draft amendments, meant to pave the way for his sacking..

The changes that call for discharging the present governor, vice governor and members of the Council while ignoring the procedures laid down in the current law on the NBS are a serious violation of the central bank's independence, the IMF official's letter says.

The amendment that allows the NBS to buy securities issued by the government and other public bodies on the secondary market enables indirect funding of the public sector, which is a serious risk for the NBS foreign exchange reserve and the dinar's value against foreign currencies, Moghadam pointed out.

The adoption of these amendments would create insecurity, damage policy credibility and impose questions about the correctness of the macroeconomic policies, she remarked.

"Existing arrangement with IMF is dead"

Earlier in the day, Serbian Minister of Economy and Finance Mlađan Dinkić sais that representatives of the International Monetary Fund (IMF) were invited to come to Serbia, adding that they would have to talk about an entirely new arrangement for the existing program was "dead".

"We will talk with the IMF mission, which is officially invited to come when they want, on a new program that will be in the interest of Serbia, and that will be realized," Dinkić told reporters at the Palace of Serbia on Thursday.

According to preliminary talks with IMF representatives, the existing program was "dead" and a new one should be made, Dinkić said.

Therefore we should not expect the program that was formally signed last year to be continued, because it is not realistic, Dinkić said.

Head of the IMF office in Serbia Bogdan Lissovolik said earlier that the IMF mission is willing to come at an invitation from the Serbian government and continue negotiations, and that the starting point for the talks should be the latest economic, fiscal and other events and data.