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Greater pressure for strenghtening dinar in Serbia

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NBS Vice-Governor Nikola Dragašević pointed out that since 2017, there has been greater pressure to strengthen the dinar than to weaken it, and that is why the National Bank bought 6.3 billion euros in previous years, and 1.1 billion euros this year.

“As for the factors that affected the foreign exchange market, it is the continuation of the increased demand of importers of energy products, especially in the first quarter.” Due to lower prices, but also slightly lower quantity demand in the first quarter, it amounted to less than one billion euros by the three largest energy importers: NIS, EPS and “Srbijagas”, which is 20 percent less than the average in five previous quarters.

Director of the Department for Monetary Analysis and Reporting in the Sector for Economic Research and Statistics of the NBS, Mirjana Miletić, referred to food prices and their impact on inflation and pointed out that the world food price index in March 2022 was at its maximum, which was by almost 70 percent. Higher than after the outbreak of the pandemic, when food prices were at a minimum.

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According to her, prices fell after that, but they are still slightly more than 20 percent higher than in the period from 2012 to 2020, when there were no major price shocks. She stated that the prices of vegetables were 30 percent higher in March and that it is seasonally common for these prices to rise in the spring, and that this percentage is usually around 15.

“The decrease in cost pressures that is happening should also lead to a decrease in food prices.” We expect food prices to have a downward trajectory and that in a year, food prices, excluding fruits and vegetables, will reduce their contribution to inflation by five to 5.5 percentage points,” said Miletić.


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