The governor of the National Bank of Serbia, Jorgovanka Tabakovic, pointed out that the reserves of euros and gold are at a record high level.
Tabakovic told that the gross foreign exchange reserves of the NBS were at a record high level at the end of September and have been monitored and amounted to 16.8 billion euros.
“In the previous five years, since, as a result of improved macroeconomic performance of our country, structural appreciation pressures have been recorded, the main source of increase in foreign exchange reserves has been NBS interventions by net purchase of foreign exchange on the domestic foreign exchange market. It is the healthiest way to increase reserves, because it does not imply any borrowing or other obligations,” she explained.
She said that in that period, 4.7 billion euros were bought in net amount through interventions.
According to her, the reserves were mostly used for the net deleveraging of the state on the basis of loans and securities.
As for gold reserves, Tabakovic says that Serbia has 36.9 tons of gold, which is almost two and a half times more than at the end of 2012, when we had 15.3 tons of gold.
“Serbia has more gold than all the republics of the former SFRY, and some countries, such as Croatia, sold all their gold reserves during the previous period,” she said, adding that gold serves as a guarantee of trust, and as a form of protection against inflation in the long run, but also for the management of foreign exchange reserves, because gold is bought in order to further diversify the structure of foreign exchange reserves, which strengthens the financial stability of the country.
The most important thing for citizens and the economy, she says, is that in the future the NBS will continue to pursue a predictable and credible monetary policy, the focus of which has been preserving overall stability for years, both price and financial system stability and the necessary relative exchange rate stability.
“Thanks to the activities of the National Bank of Serbia, the relative stability of the dinar exchange rate against the euro has been achieved, which has been maintained for more than nine years. If something is stable for a longer period of time, it means that it is fundamentally at the level that is market-determined as realistic, at which it should be,” she said.
Tabakovic said that exports are not stimulated by the exchange rate, especially in economies with an increased degree of euroization, but by structural policies, but long-term exports are encouraged primarily as our country has been doing for years – by building export capacities and joining global production and service chains.
“All this requires stability in every respect – price stability, financial, fiscal and political stability. In an open economy like ours, the precondition for the overall stability and growth of business, investment and consumer confidence is the stability of the exchange rate,” Tabakovic explained.
According to her, the NBS was the first economic institution in the country, and also one of the first central banks in the region, which responded to the pandemic by adopting concrete measures.
Speaking about inflation, she said that the current growth is under the influence of temporary factors and is mostly a consequence of the low base from last year, as well as global trends on the supply side – primarily the exit of the world economy from the pandemic.
“We expect that inflation will remain above the upper limit of the target range for several more months, which is the case in other countries, after which it will return to the lower half of the target range during 2022,” Tabakovic said.
The NBS is carefully measuring the reaction of monetary policy to temporarily higher inflation, and has taken the first steps towards tightening monetary conditions, but has enough room to react more strongly if it turns out that this effect from the international environment can be more lasting, Dnevnik reports.
