Relations with the International Monetary Fund

Serbia’s membership in the IMF

The former Socialist Federal Republic of Yugoslavia (SFRY) was one of the participants in the United Nations Monetary and Financial Conference at Bretton Woods (1944), as well as one of the founding countries of the International Monetary Fund (IMF) and the World Bank (WB). On 14 December 1992, the IMF Executive Board recognised the dissolution of the SFRY and terminated its membership in the IMF, while at the same time determining the conditions to be met by successor states in order to join the IMF and succeed the membership of the SFRY. The Federal Republic of Yugoslavia received a 36.52% share in the assets and liabilities of the SFRY in the IMF.

On 20 December 2000, the IMF Executive Board took a decision coming into effect retroactively on 14 December 1992 (Press Release No. 00/75) that the FR Yugoslavia had met the conditions required for joining this institution.

After the Republic of Montenegro seceded, the Republic of Serbia inherited the international legal personality of the former State Union of Serbia and Montenegro and continued its membership in international financial organisations.

On 21 July 2006, the IMF confirmed that the Republic of Serbia is the continuing state of the former State Union of Serbia and Montenegro (Press Release No. 06/161), as well as that it continues its membership with the existing quota of SDR 467.7 million and retains all rights and obligations stemming from this membership.
The Governor of the NBS serves as the Serbian Governor to the IMF, while a Vice-Governor of the NBS serves as the Alternate Governor to the IMF.

The Republic of Serbia has been a member of the Swiss constituency, a voting group through which it exercises its voting power in the IMF and the WB since December 2000. This constituency is composed of Switzerland, Poland, Serbia, Turkmenistan, Kazakhstan, Azerbaijan, the Kyrgyz Republic, Tajikistan and Uzbekistan. In 2009, a meeting of the Swiss constituency members was held in Belgrade.

Regular cooperation between the Republic of Serbia and the IMF is conducted in the form of annual consultations under Article IV of the IMF Articles of Agreement. These consultations represent a statutory obligation of its members, based on which the IMF assesses the economic situation in a country and the adequacy of its economic policy measures.

Serbian quota increase in the IMF

The IMF’s comprehensive quota and governance reforms entered into force on 26 January 2016, which allowed for a doubling of IMF quotas under the 14th General Review of Quotas and a major shift in quota shares of the IMF members (Press Release No.16/25).

On 10 February 2016, Serbia settled its obligations to the IMF arising from its quota increase from SDR 467.7 million to SDR 654.8 million. Owing to this, the volume of potential financial assistance under future arrangements with the IMF has been proportionately expanded.

Cooperation programmes between the Republic of Serbia and the IMF

From 2000, cooperation between the Republic of Serbia and the IMF took place under the following arrangements:

  • 20 December 2000: Emergency Post-Conflict Assistance was approved in the amount of SDR 116.92 mn (around EUR 167.19 mn and 24.99% of the Serbian quota in the IMF) in order to support the country’s economic stabilisation programme and the reconstruction of institutions and administration (Press Release No. 00/75). The FR Yugoslavia channelled those funds to repay the bridge loan (SDR 101.1 mn, or around EUR 144.57 mn) granted by Switzerland and Norway to settle its obligations to the IMF.
  • 11 June 2001: a Stand-by Arrangement was concluded in the amount of SDR 200 mn (around EUR 293.7 mn, 42.76% of the quota), as financial support to further macroeconomic and structural reforms (Press Release No. 01/31). These funds were disbursed through four equal tranches, and repaid between March 2004 and May 2006.
  • 13 May 2002: a three-year Extended Facility Arrangement was approved in the total amount of SDR 650 mn (around EUR 909.38 mn, 138.98% of the quota) (Press Release No. 02/25), to support the economic programme of stabilisation and reforms. The approved funds were fully disbursed through 12 tranches and were repaid ahead of schedule during 2006 and 2007. The conclusion of this arrangement was especially significant because it paved the way for the implementation of the first stage of write-off of debt to Paris Club creditors in the amount of 51% (around USD 2 bn), while the successful realisation of the arrangement led to an additional 15% debt reduction totalling around USD 700 mn.
  • 16 January 2009: a precautionary Stand-by Arrangement in the amount of SDR 350.77 mn (around EUR 400.33 mn, 75% of the quota) (Press Release No. 09/12) was concluded. Due to unexpected negative events in the external financial environment, it was increased on 15 May 2009 to SDR 2,619.12 mn (around EUR 2,941.95 mn, 560% of the quota) (Press Release No. 09/169). Of that amount, a total of SDR 1,367.74 mn (EUR 1,536.33 mn, 293% of the quota) was drawn. This arrangement was successfully finished on 8 April 2011.
  • 29 September 2011: an 18-month precautionary Stand-by Arrangement was approved in the amount of SDR 935.4 mn (around EUR 1,076.75 mn, 200% of the quota). This Arrangement was concluded with a view to maintaining macroeconomic and financial stability in the country and improving the investment climate (Press Release No. 11/353). The first review under the Stand-by Arrangement in February 2012 was not positive because the 2012 budget deviated from the agreed fiscal program, and the approved funds were not drawn. 
  • 23 February 2015: a new 36-month Stand-by Arrangement was approved in the amount of SDR 935.4 mn (around EUR 1,168.5 mn), to support the agreed economic programme for the period 2015-2017. It was a precautionary arrangement, which means there was no intention to draw on the funds approved, except in case of BoP needs of the country (Press Release No. 15/67). This Stand-by Arrangement was successfully concluded on 23 February 2018. The implementation of the agreed economic programme helped achieve the objectives concerning macroeconomic balance, with a successful fiscal consolidation, improvement of the financial sector, strengthening the competitiveness and economic growth. The available funds were not used.
  • In July 2018, the IMF approved to Serbia a 30-month economic programme supported by the PCI. The programme was of advisory nature and did not envisage the use of funds. It was successfully concluded in January 2021 (IMF Press Release No. 21/3) (NBS Press Release of 8/1/2021). The aim of the programme was the maintenance of macroeconomic and financial stability, continuation of structural and institutional reforms to encourage faster and inclusive growth, creation of new jobs, and improvement of the standard of living. Though the programme had to be adjusted due to the pandemic, i.e. its focus shifted to the preservation of corporate and financial sectors and the protection of citizens, the key programme objectives were successfully achieved.

Policy Coordination Instrument 2021

On 18 June 2021, the IMF Executive Board approved to the Republic of Serbia a new 30-month cooperation programme supported by the Policy Coordination Instrument (PCI) and concluded regular 2021 Article IV consultation (IMF Press Release No. 21/189) (NBS Press Release of 18/6/2021).

The new programme builds on the previous one, which successfully ended in January 2021, and represents the continuation of successful cooperation through a partnership created with the IMF. It is also an additional confirmation that Serbia pursues a successful and credible economic policy. As the previous one, the new programme is of advisory nature and does not envisage the use of IMF funds.

The purpose of the new programme is to support Serbia’s economic recovery from the negative effects of the pandemic. Concrete objectives defined by the agreed macroeconomic programme support the economic policy and reform agenda of the Republic of Serbia. They build on the reforms implemented and the results achieved so far, and envisage:

  • Preservation of macroeconomic stability, primarily through continued implementation of the plan of structural fiscal reforms for the purpose of maintaining fiscal sustainability;
  • Strengthening of financial sector resilience, among other things by further increasing the degree of dinarisation and developing the capital market; and
  • Implementation of a comprehensive plan of structural and institutional reforms in order to encourage high ecological, inclusive and sustainable growth in the medium run.

In making the decision on approving the new cooperation programme, IMF Executive Directors commended the Serbian authorities’ strong policy response, which cushioned the impact of the pandemic and set the stage for an economic recovery. They stated that the accommodative monetary and financial sector policies remain appropriate and that the central bank supported, with its extraordinary measures, economic activity during the pandemic. Moreover, inflation is low, the exchange rate is stable and inflation expectations are well-anchored. As assessed by Executive Directors, the banking system remains stable, liquid and well-capitalised. They particularly lauded the plans concerning further support to dinarisation and improvement of the capital market.

The implementation of the agreed economic programme will be monitored through five semi-annual reviews. Successful completion of each review will be an additional signal of Serbia’s commitment to the continuity of implementation of robust macroeconomic policies and structural reforms.

The first review was successfully completed on 20 December 2021 (IMF Press Release No. 21/392, NBS Press Release 20/12/2021).

The second review was successfully completed on 27 June 2022 (IMF Press Release No 22/230, NBS Press Release 27/06/2022).


The PCI is a new IMF support mechanism available to all IMF members. It is of advisory nature and does not envisage the use of funds. It is designed for countries seeking to demonstrate commitment to a reform agenda and is agreed in order to obtain support for an economic programme, when the country has no current or potential balance of payment issues.


Previous cooperation programs

  • The programme supported by the Policy Coordination Instrument which the IMF approved to the Republic of Serbia in July 2018 was successfully concluded in January 2021.

    The programme built on the precautionary Stand-By Arrangement which Serbia successfully concluded in February 2018. It was approved for a 30-month period, was of advisory nature and did not envisage the use of funds.

    The aim of the programme was the maintenance of macroeconomic and financial stability, continuation of structural and institutional reforms to encourage faster and inclusive growth, creation of new jobs, and improvement of the standard of living. Though the programme had to be adjusted due to the pandemic, i.e. its focus shifted to the preservation of corporate and financial sectors and the protection of citizens, its key objectives were successfully achieved.

    Serbia faced the crisis in a much more favourable macroeconomic position than the previous crises. It boasted vibrant economic growth, low and stable inflation, eliminated fiscal imbalances, significantly reduced external imbalances, and record high FX reserves of the country.

    Owing to strong economic foundations and large-scale measures of economic policy makers, as well as the favourable structure of the economy, which now relied less on contact-intensive sectors, including a relatively high share of agriculture and the food industry, the economy declined by merely 0.9% in 2020.

    In the course of the programme, significant progress was achieved in terms of modernisation of the Tax Administration, strengthening of the public investment framework and fiscal risk monitoring and management.

    An an environment of an unprecedented shock in recent history, the IMF assessed that the responsible approach to leading the country and policy formulation and implementation was enabled by the robust and adequate response in the form of comprehensive and timely support measures for businesses and citizens, without prejudice to price and financial stability. The IMF also concluded that the National Bank of Serbia’s response was timely and robust, aimed at preserving the liquidity of the banking and financial sectors. The National Bank was resolved to make sure that financial conditions remain stimulating for businesses and citizens, with a view to enabling fast and vigorous economic recovery of the country.

    Progress in the implementation of the agreed economic programme was monitored through five semi-annual reviews. The IMF Executive Board stated that throughout its duration, the programme was being successfully implemented, as also confirmed by the fact that the decisions on the successful conclusion of the reviews were made even without formal meetings of the IMF Executive Board, which is an opportunity used when assessed that a formal discussion is not needed in light of good macroeconomic results and solid implementation of economic policy measures.

    The IMF Executive Board assessed that in the coming period Serbia should accelerate the implementation of structural and institutional reforms to ensure faster convergence to EU income levels. The medium-term reform priorities should include further development of the capital market and improvement of governance.

    The PCI is a new IMF support mechanism available to all IMF members. It is of advisory nature and does not envisage the use of funds. It is designed for countries seeking to demonstrate commitment to a reform agenda and is agreed in order to obtain support for an economic programme, when the country has no current or potential balance of payment issues.

  • Republic of Serbia Successfully Concludes the Three-Year Stand-By Arrangement with the IMF

    The three-year stand-by arrangement approved by the IMF to the Republic of Serbia on 23 February 2015, worth SDR 935.4 mn (around EUR 1.2 bn) was successfully concluded on 22 February 2018. By implementing the agreed economic programme, Serbia has attained the objectives concerning the achievement of macroeconomic balance, by ensuring the sustainability of public finance, improving the resilience of the financial sector and strengthening competitiveness and economic growth.
    The arrangement was precautionary, meaning that Serbia had no intention to use the funds approved, unless in the case of balance of payments needs. During the arrangement, eight reviews of the agreed economic programme were conducted, which the IMF Executive Board assessed positively. The funds available were not drawn.

    The results achieved under the economic programme largely exceeded the expectations. Economic activity recorded steady growth and real GDP is higher than before the world economic crisis, reflecting rising investment, exports and employment. Robust fiscal consolidation was implemented, yielding results much better than expected, owing to firm control of current expenditures and sound revenue collection. Within three years, the general government deficit turned into a surplus, thus securing a stable fiscal position and creating the basis for macroeconomic stability. Significant progress was also achieved in the field of structural reforms, strengthening the growth potential of the Serbian economy, along with job creation and a reduction in fiscal risks. Cooperation with the IMF under this arrangement also resulted in a higher FDI inflow and an upgrade in the country’s credit rating.

    During the arrangement, the NBS pursued cautious monetary accommodation in the inflation targeting regime, monitoring the signals from the international environment and the domestic market, thereby giving a key contribution to the country’s economic recovery. Low and stable inflation and financial stability have been achieved, along with the relative stability of the exchange rate, all of which significantly boosted confidence in the domestic market. Interest rates on dinar borrowing were reduced, leading to a rise in lending activity and investment.

    Financial sector reforms have increased the resilience of banks, bringing them into a much better position to support the real sector. The measures aimed at reducing the NPL share in total loans, implemented by the NBS in cooperation with the Government, produced excellent results – the NPL level was more than halved compared to 2015. The reforms of state-owned financial institutions are underway. The NBS has begun to implement Basel III standards, thus further reinforcing the central bank’s supervisory function, in accordance with standards of the ESCB.

  • The Executive Board of the International Monetary Fund (IMF) approved a three-year financial arrangement with FR Yugoslavia (FRY), the so-called Extended Arrangement for SDR 650 (about USD 829 million) to support the FRY's economic program of stabilization and reforms in the period 2002-2005 (Press Release No. 02/25 of May 13, 2002).

    The approval will enable the FRY to draw SDR 50 million (about USD 64 million) immediately, when the Arrangement goes into effect on May 14, 2002. The funds provided through the Extended Arrangement would be drawn in 13 tranches of SDR 50 million, subject to the bi-annual economic programme and structural reforms performance criteria assessment.

    The new financial arrangement was approved due to achievements and good results of the economic program and structural reforms set in the Stand-by Arrangement of June 11, 2001 as well as sustainable economic stabilization and reforms program of FRY for the period 2002-2005. The core medium-term economic program goals include: achievement of sustainable economic growth, improvement of citizens' living standard, lowering the inflation rate and father strengthening of country's foreign currency reserves. Key reforms will be implemented in the area of foreign exchange market liberalization, improvement of domestic payment system, enforcement of bank supervision, fostering of tax administration and stepping up the privatization process.

    The approval of the Financial Arrangement with the Fund will enable FRY to realize the first phase of lowering of FRY external debt towards the Paris Club Creditors amounting to 51%, i.e. about USD 2 billion, in line with the Reconciled Memorandum On the Federal Republic of Yugoslavia's Debt Consolidation, signed on December 28, 2001.

    Following the Executive Board discussion, it was announced that 'the IMF commends the FRY authorities on the impressive achievements in stabilization and reform since late 2000, when the FRY succeeded to membership in the Fund.' It was also said that the authorities medium-term economic program, supported by the Extended Fund Arrangement, aimed to achieve further progress in stabilization while providing for the restructuring and investment needs of the economy. The authorities were advised to firmly implement the program in order to keep FRY on a path towards durable growth and external sustainability. The authorities were also commended for demonstrated commitment to reforms in macroeconomic, monetary and fiscal policy and impressive speed with which they moved to implement key structural reforms. It was noted that the authorities' medium-term fiscal policy framework is consistent with achieving lower inflation and fiscal sustainability, cautioning, however, that it was critical for the fiscal sustainability to improve tax administration and streamline expenditure through improved efficiency in the delivery of services and better targeting of benefits.

    The IMF welcomed further liberalization of the exchange system which paved the way for the acceptance by FRY of the obligations under Article VIII, Sections 2, 3 and 4, as well as firm intention of the National Bank of Yugoslavia to closely monitor developments in the foreign exchange market and to keep exchange rate policy under close review.

  • O June 11th 2001 te IMF Executive Board has granted a stand-by loan to the FR Yugoslavia worth 200 million SDR (approximately USD 249 million) as a means to support the Federal Government’s economic programme (Press Release No. 01/31 June 11, 2001).

    On that occasion, Mr. Stanley Fisher, First Deputy of the Managing Director and Acting Chairman said:

    “The FRY authorities have embarked with impressive speed and commitment on the extremely difficult task of reconstructing their devastated economy. Maintaining this momentum will be key to building broad political support for the reform and securing its sustainability.”

    He also stressed that progess toward sustainable growth and external viability would require strong support from creditors and donors and that the Donor Conference on June 29 would provide the international community the opportunity to demonstrate its support by commiting program and project assistance in line with FRY estimated needs.

    FR Yugoslavia was immediately granted further 50 million SDR (approx. USD 62 mil). The remaining part will be available in three equal instalments each worth 50 mil. SDR, following the evaluation of the quarterly economic programme performance indicators as was agreed with the IMF.

    The results of the stand-by arrangement implementation are monitored quaterly on the basis of the accomplishment of the previously agreed upon quantitative performance criteria (net foreign reserves of the NBY, net domestic assets, borrowings of the consolidated general government from the banking sector, raising of new non-concessional foreign loans by the public sector, and prevention of sccumulation of new arreas under foreign debt servicing), as well as of the structural measures in the fiscal, financial and private sector.