Small drop "in exchange rate" can be expected - NBS chief

BELGRADE NBS Governor Jorgovanka Tabakovic says that by the end of the year "certain pressures could be expected in the foreign exchange (FX) market." As a result, the central bank chief told B92 on Thursday, "a small drop in the dinar-euro exchange rate could be expected." Small drop "in exchange rate" can be expected - NBS chief Tabakovic explained that the greatest pressure in the FX market is typical of December, as enterprises are in a hurry to spend the funds earmarked for public procurement, while the economy and state meet their liabilities. The central bank does not target some particular level of the exchange rate, but is trying to keep the floating exchange rate relatively stable at the least possible cost, she noted. In 2014, the inflation in Serbia is expected to stand at around four percent, and remain stable in the coming three-year period, so that the country could ensure stable conditions for business operations, Tabakovic said. "The low inflation in 2013 is partly a consequence of the low demand and poor purchasing power," she said, adding that a rise in the lower VAT rate in 2014 will not result in significant price hikes. She stressed that it must be determined who is accountable for the problems that were created in the state-owned banks and huge expenditures that had to be financed with taxpayers' money, so that those people face proper punishments, including the seizure of unlawfully gained assets and property. Referring to an arrangement with the International Monetary Fund (IMF), Tabakovic said that the financial institution is watching over us so that it does not repeat errors it made in Greece, Romania, Bulgaria. "Serbia's foreign currency reserves stand at a high level, and the country does not need an arrangement with the IMF because of money, but the institution has to be a kind of controller and consultant," the NBS governor underscored. (Tanjug, file) B92 Tanjug

Small drop "in exchange rate" can be expected - NBS chief

Tabaković explained that the greatest pressure in the FX market is typical of December, as enterprises are in a hurry to spend the funds earmarked for public procurement, while the economy and state meet their liabilities.

The central bank does not target some particular level of the exchange rate, but is trying to keep the floating exchange rate relatively stable at the least possible cost, she noted.

In 2014, the inflation in Serbia is expected to stand at around four percent, and remain stable in the coming three-year period, so that the country could ensure stable conditions for business operations, Tabaković said.

"The low inflation in 2013 is partly a consequence of the low demand and poor purchasing power," she said, adding that a rise in the lower VAT rate in 2014 will not result in significant price hikes.

She stressed that it must be determined who is accountable for the problems that were created in the state-owned banks and huge expenditures that had to be financed with taxpayers' money, so that those people face proper punishments, including the seizure of unlawfully gained assets and property.

Referring to an arrangement with the International Monetary Fund (IMF), Tabaković said that the financial institution is watching over us so that it does not repeat errors it made in Greece, Romania, Bulgaria.

"Serbia's foreign currency reserves stand at a high level, and the country does not need an arrangement with the IMF because of money, but the institution has to be a kind of controller and consultant," the NBS governor underscored.