Drop in value of domestic currency "not dramatic"

Drop in value of domestic currency "not dramatic"

BELGRADE -- The drop of the Serbian dinar (RSD) to its record low against the euro this year "is not dramatic," economists told Tanjug on Monday.

They added that "exporters can derive benefits from the lower dinar value."

On Monday, dinar dropped against the euro by 0.1 percent or 15 paras despite the central bank's intervention on the foreign currency market, thus the Serbian national currency recorded a historic low with medium exchange rate at RSD 116.1844, the National Bank of Serbia (NBS) released.

The Serbian currency has on the drop for the fourth day in a row and on Monday, NBS sold EUR 20 million on the inter-bank foreign currency market to prevent excessive daily volatility of the exchange rate.

Since the beginning of the year, NBS bought EUR 190 million and sold EUR 840 million on the foreign currency market.

The dinar is lower against the euro by 0.5 percent compared to the previous month and by 1.7 lower than a year ago.

The indicative exchange rate of the dinar against the U.S. dollar dropped by 0.3 percent and the exchange rate was thus set at RSD 85.4989.

Former NBS governor Dejan Šoškić said that mild exchange rate corrections are completely normal in the monetary regime which Serbia has been implementing since 2008.

“The upwards or downwards oscillations of the exchange rate in the regime of target inflation are normal,” he told Tanjug.

Šoškić, a professor at the Faculty of Economics in Belgrade, voiced the belief that NBS should limit its role to the prevention of excessive oscillations in the exchange rate.

Economist Ljubodrag Savić stated that the current...