The dollar continues to fall, even in relation to our currency. In recent days, its value is below one hundred dinars. Therefore, the value of the Serbian public debt, ie the part indexed in this currency, is currently falling. Given that the dollar often oscillates, economists assure that it is good that we have reduced our obligations related to it in the last few years.
Serbia, at the level of the general state, owed a total of 27.2 billion euros on the last day of June. Most of the liabilities are related to the European currency – 47.7 percent. We owe 5.2 billion in dollars – which is 17.1 percent. The largest part of our public debt was tied to the American currency in 2016 – a third of all liabilities. And it was at record values just then – it exceeded 108 dinars.
– In recent years, we have restructured indebtedness in dollars, in order to reduce the risk of its oscillations. In the case of the strengthening dollar, our public debt grew, although it had nothing to do with us. Our transactions are in dinars and euros. Only energy is paid in dollars. In the last three to four years, the state has reduced its reliance on the American currency by issuing Eurobonds and early repayment of part of the loan. At the moment, the dollar is weak, so the effect is favorable, but we often have periods of strengthening of this currency. In that case, its oscillations could disrupt Serbia’s external position – explains economist Ivan Nikolic.
Oscillations of the dollar directly affect the prices of commodities. As Ivan Nikolic explains, at the moment when he is weak, the possible growth of the value of those goods is neutralized. Gold is currently at a record high. We feel its increase in price less, because at the same time it weakened the dollar in which it is calculated.
Experts believe that there are several reasons for the weakening of the dollar. The American economy is facing the consequences of the Covid-19 pandemic, the strengthening of the Chinese economy is putting pressure on it, and elections are coming.
– There are several factors that probably influence. Catching up with China, the negative effects of the corona, but also electoral tensions. Their outcome and the measures that will follow are awaited – Nikolic believes, Srbija Danas reports.
