NBS governor expects currency "to regain trust"

BELGRADE -- NBS Governor Jorgovanka Tabaković expects inflation in 2014 to remain within target values - four percent with plus/minus 1.5 percent.

(Tanjug, file)
(Tanjug, file)

The central bank head is also hopeful that the Serbian dinar (RSD) will "regain trust."

Tabaković said she expects the dinar to become the predominant payment currency in 2014 and that there will be no "euroisation of the economy," with confidence in the dinar restored.

"We will do everything to make 2014 a successful year too, but we will not see it as a complete success if our results are not felt by the citizens as slight improvements in the living standard," Tabaković told B92.

All institutions in charge of fiscal consolidation should contribute to a rise in the living standard, she said.

"I think that the fact that international financial institutions, in particular, the IMF, view the Serbian budget as a step in a good direction in terms of precisely defining the current situation and the economic capabilities, as well as courage to embark on structural reforms, is a good signal," Tabaković said.

Some progress has been made, and it is not the people who have been changed, but their behavior, which is a success, Tabaković said.

"I inherited a goal set in 2009 - a target inflation of four percent plus/minus 1.5 percent, with the actual inflation at 12.2 percent in 2012. It is now within target values. We did not change the people or the monetary policy measures. However, we did change the approach to this goal and I believe that a change in behavior can lead to success," Tabaković said.

Tabaković said she expects the arrival of a bank from the United Arab Emirates to bring lower interest rates in 2014.

I expect competition to bring lower interest rates, which has not happened despite structural changes in the banking system and the arrival of many banks over the past 10 years, Tabaković said, adding that she expects "that trend to start."