Dinar slides despite intervention

Albanez:
The last thing you would get from an IMF intervention is confidence. If a country has to accetp a single condition from the IMF, it is a clear sign of absolute economic disaster!

Further, it si not bad, but good, that the Dinar is falling. That will help close the trade deficit, by making imports more expensive and exports more competitive. That will create jobs, and fix the economy in the medium run.

And if inflation is regarded a problem (and it is), the Serbian autorities should focus on totally different issues than the Dinar value. They should, first and foremost, focus on increasing competition in domestic markets. Further, they should focusing on keeping a balanced budget, which would have an immediate effect on prices. Hence, increased pensions should come from increased taxes, decreased inflation should come from improved competition, and new jobs should come primarily from export industries.

Let the Dinar slide to it's natural state of RSD 100-120/€!

I agree with TS: the decline of the dinar is a good thing. Only: it is not going fast enough.

The dinar was inflated by foreign investment and cheap foreign credit. That era is over - it will take years before Western capital markets start to invest in developping economies again. So the dinar needs to adapt. The longer the central bank delays this the more money it will waste on policies that only benefit speculators. That money can much better be spent on mitigating the effects of such a devaluation - including support for companies with much foreign debt.

Serbia needs an IMF loan at least for confidence. Your reserves will be gone if this keeps up for a few months

My comments was based on their decision to support the currency. If you want to support , your reserves will run out.

Serbia needs an IMF loan at least for confidence. Your reserves will be gone if this keeps up for a few months

Albanez:
The last thing you would get from an IMF intervention is confidence. If a country has to accetp a single condition from the IMF, it is a clear sign of absolute economic disaster!

Further, it si not bad, but good, that the Dinar is falling. That will help close the trade deficit, by making imports more expensive and exports more competitive. That will create jobs, and fix the economy in the medium run.

And if inflation is regarded a problem (and it is), the Serbian autorities should focus on totally different issues than the Dinar value. They should, first and foremost, focus on increasing competition in domestic markets. Further, they should focusing on keeping a balanced budget, which would have an immediate effect on prices. Hence, increased pensions should come from increased taxes, decreased inflation should come from improved competition, and new jobs should come primarily from export industries.

Let the Dinar slide to it's natural state of RSD 100-120/€!

I agree with TS: the decline of the dinar is a good thing. Only: it is not going fast enough.

The dinar was inflated by foreign investment and cheap foreign credit. That era is over - it will take years before Western capital markets start to invest in developping economies again. So the dinar needs to adapt. The longer the central bank delays this the more money it will waste on policies that only benefit speculators. That money can much better be spent on mitigating the effects of such a devaluation - including support for companies with much foreign debt.

My comments was based on their decision to support the currency. If you want to support , your reserves will run out.