"Holiday season forex inflow won't help currency"

"Holiday season forex inflow won't help currency"

“That is a normal development for economies such as ours,” Savic said, replying to the question as to whether the drop in the dinar and today's exchange rate against the euro of RSD 122, which reflects an all-time low, is a cause for alarm.

He said that he does not expect that the foreign currency inflow over the New Year holidays would be enough for the exchange rate to recover.

“Due to the crisis, Serbia has a smaller foreign currency inflow, and the question remains whether those who are going to come will spend as much as they have done so far, as the lower spending is prevalent in the world, and Europe in particular, “ Savic told Radio B92.

The exchange rate is also affected by the fact that foreign companies are withdrawing a part of their profit or invested capital to their parent companies abroad.

According to Savic, together with short-term seasonal effects, there is also an influence of the global circumstances such as the crisis in Ukraine that has an effect on the entire region.

“The dinar volatility is associated with the general trends in the world on one hand, and with what is happening in the Serbian economy on the other. During this year, we also had floods, because of which a part of our energy capacities was out of operation, and the state had to step up the import of energy-generating products, which implies higher expenses and forex outflow, but the production and export were also reduced, the forex inflow too. These are external factors, but the dominant internal factor is stagnation or a slump in our production,” Savic said.