Central bank "reduces historical burden of hyperinflation"

By achieving and maintaining financial and price stability over the past two years, the NBS made the best possible contribution to the 2016 GDP growth of 2.8%.

Source: Tanjug
(Tanjug, file)
(Tanjug, file)

National Bank of Serbia (NBS) Governor Jorgovanka Tabakovic said this on Tuesday, reporting to the Serbian National Assembly's Committee on Finance, Budget and Public Spending Control on central bank's activities in 2015-2016.

According to her, the NBS has "fulfilled its legal obligations over the past two years."

"In one year, inflation was reduced from 12.9 percent in October 2012 to 2.2 percent in October 2013. Now, four years after that, inflation is low and stable," said Tabakovic.

According to her, the average annual inflation rate in 2016 was 1.2 percent, and a year before it was 1.4 percent.

Pointing out that by successfully implementation the monetary policy during this period, the NBS reduced the historical burden of hyperinflation from the 1990s, and thus strengthened the credibility of the central bank, Tabakovic said that this was confirmed by international rating agencies, and remarked that "the credibility of NBS is earned."

The governor particularly pointed out the growth of the confidence of citizens and economy in the Serbian dinar, adding that the dinarization process was last year supported by the first issue of dinar securities by the European Bank for Reconstruction and Development (EBRD), considering that the funds from this were intended for lending to the domestic economy.

"We expect that the price stability achieved will be permanently maintained," Tabakovic said, recalling that last year the NBS and the government decided to decrease the target for inflation, starting in January 2017, from 4.0 percent to 3.0 percent with deviations by 1.5 percentage points in both directions.

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