Currency lowest this year, NBS aims for "stabilization"

Currency lowest this year, NBS aims for "stabilization"

BELGRADE -- The aim of the central bank the coming period is to focus on stabilization of the inflation rate on a low and sustainable level, says Jorgovanka Tabaković.

In an interview for the Belgrade-based daily Večernje Novosti, the governor of the National Bank of Serbia (NBS) said that measures announced by new Finance Minister Dušan Vujović are "the right sequence of moves for introduction of order and sustainable foundations in public finance."

According to Tabaković, macroeconomic stabilization, keeping inflation at a low rate and public finance consolidation are the best way to help the economy in the long run.

Grey economy also needs to be countered, which can be achieved primarily through adoption of laws on accounting, said Tabaković who has been heading the central bank for two years now.

Commenting on the exchange rate, the governor explained that "oscillations are common in a flexible exchange rate regime," adding that the main reasons come from "the international environment, uncertainties of the geopolitical situation concerning Ukraine and the monetary policy of U.S. Federal Reserves."

The impacts from the local environment, she said, are linked to the pace of public finance consolidation and increased demand for foreign currencies.

Tabaković also expressed the belief that the trend of interest rate reduction which has already been launched would continue in the time to come.

On Friday, the NBS announced that the Serbian dinar (RSD) lost 0.1 percent of its value against the euro (EUR), as the exchange rate reached a new record low of RSD 116.9904 for one euro.

This happened despite the...