Nine years of work of Governor Jorgovanka Tabaković – nine years of stability

In the course of nine years, the NBS, headed by Governor Jorgovanka Tabaković, has fully met its statutory objectives – price stability has been achieved and preserved, and financial stability has been strengthened. As a result, our citizens and corporates can more easily do business and make plans, and our economy can develop further on sound foundations.


  • After we lowered the inherited high inflation to a low level within one year, in the course of eight years already we have been keeping it at an average level of around 2%.
  • Within nine years, the dinar has gained 0.9% against the euro and, at the same time, the NBS bought in the FX market EUR 3.2 bn net, of which EUR 745 mn in 2021.
  • According to the latest available data (4 August 2021), gross FX reserves reached a record level of EUR 14.7 bn, up by EUR 4.6 bn since August 2012. In the same period, net FX reserves more than doubled.
  • The 36.7 tonnes of gold made up 12.4% of total FX reserves at end-July 2021, while in late 2012 they made up only 5.7% of total FX reserves of the country. Since end-2012 to date, they have increased by more than 21 tonnes, i.e. they more than doubled, while their value trebled – from EUR 0.6 bn to EUR 1.813 bn.
  • Dinar savings have exceeded RSD 100 bn. At record RSD 100.5 bn at end-July 2021, they are higher around 6 times compared to 2012.
  • From inherited around 20% (a fifth of banking sector assets), the share of NPLs in total banking sector loans was reduced to 3.6% until June 2021, despite the pandemic.
  • Interest rates on new dinar corporate loans are by around 14 pp lower and rates on household loans by over 12 pp lower compared to the start of monetary policy easing in May 2013 (after inflation was put under control).
  • Conditions of government financing in the domestic and international market are much more favourable – for instance, the interest rate on ten-year government dinar securities equals 2.5%, versus 13% in October 2014, when they were issued for the first time.
  • As at 2020, interest and exchange rate difference expenses of the Serbian corporate sector were lower by RSD 278 bn (72%) compared to 2014.
  • The number of DinaCards doubled relative to 2012.
  • The average number of transactions of citizens and businesses processed at the weekly level in all six NBS systems is above 6.5 mn.
  • Nine years ago, Serbia’s risk premium was 250 bp above EMBI Global for dollar debt. Nine years later, Serbia’s risk premium has not only been reduced by around 420 bp, but is also around 180 bp below EMBI Global for dollar debt.
  • Since early 2013, the FDI inflow has amounted to EUR 22 bn and its share in GDP has been rising in the course of years.
  • Goods exports from Serbia doubledfrom EUR 8.4 bn in 2012 to EUR 16 bn in 2020 (the year affected by the pandemic). This year, we expect exports to reach around EUR 20 bn (an increase of around 140%). Services included, exports were up from EUR 11.5 bn to around EUR 27 bn, which is the amount we expect this year (an increase of 135%). At the same time, the coverage of imports by exports rose by around 20 pp.

Having recognised her contribution to the stabilisation and growth of the Serbian economy, the London-based monthly The Banker declared Governor Jorgovanka Tabaković the best governor globally and the best European governor for 2020. “Although I personally consider this award a recognition of changes in Serbia that we have been working on since the second half of 2012, the changes that the Serbian President with his associates, and myself with my associates have been working on, the award itself belongs primarily to Serbia and its citizens”, Ms Tabaković said on that occasion.

The NBS was the recipient of the City of Belgrade award “The Hero of Belgrade” because, as stated in the explanation, it preserved financial stability in Serbia through flawless functioning during the pandemic. “The heroes are all those who behind each decision and procedure see the people for the sake of whom we exist. We have worked just as our payment system has worked – incessantly, just as our hospitals, pharmacies, grocery stores, utility workers, police officers and soldiers have worked – because our motto is: with the people, for the people, for Serbia, whose mirror we are”, highlighted Governor Tabaković.

Low inflation and confidence that inflation will remain low in the coming period

  • After we reduced the inherited high inflation to a low level within a year, in the course of eight years already we have been keeping it at the average level of around 2%, i.e. within the bounds in which most advanced economies wish to ensure inflation movements.
  • By keeping inflation at a low level, we have also preserved the real value of income of businesses and citizens, increased the predictability of doing business, and thus gave a full contribution to the improvement of the overall economic environment.
  • We demonstrated our resolve to ensure that Serbia remains in the group of countries with low and predictable inflation also by lowering the inflation target, from 4±1.5% to 3±1.5% since the start of 2017.
  • Despite elevated global cost-push pressures, our projections suggest that inflation will continue to move within our target tolerance band in the years to come.
  • Market participants are also confident that price stability and a stable business environment in Serbia will be preserved in the coming two and three years as well.

The ensured most favourable financing conditions for the government, businesses and citizens contribute to the increase in disposable income and sustainable economic growth

  • Low inflation and trust in the NBS enabled monetary policy easing, which contributed to much more favourable financing conditions for citizens, businesses and the government.
  • Since May 2013, we have cut the key policy rate by 10.75 pp, to 1.0%, which is its lowest level in the inflation targeting regime.
  • Consistent with this, businesses have at their disposal new dinar loans at the interest rate lower by around 14 pp, and households have access to dinar loans at the rate lower by more than 12 pp compared to May 2013 when monetary policy easing began.
  • Conditions of corporate dinar lending in Serbia are for the first time similar to the conditions of euro lending, and were even more favourable in some months, which has resulted in increasingly higher financing in dinars.
  • Credit growth, which has been almost double-digit in the past three years, is an important source of private sector financing. Loans are used to finance both the investment cycle and consumption, which creates full synergy between the real and financial sectors, as also seen in economic and employment growth.
  • By preserving price stability and relative stability of the exchange rate, along with a key contribution to lower costs of doing business, the NBS also helped the Serbian corporate sector to record a positive financial result since 2014 and to ensure funds for new investment. On this account, as at 2020, interest and exchange rate difference expenses of the Serbian corporate sector were lower by RSD 278 bn (72%) compared to 2014.
  • Today the government is also financed in dinars at much more favourable conditions. For instance, the interest rate on ten-year government dinar securities equals 2.5%, versus 13% in October 2014, when these securities were issued for the first time.

Stability of the dinar exchange rate against the euro – new normalcy in Serbia which ensures the certainty of doing business and planning

With the arrival of Jorgovanka Tabaković at the head of the NBS, the relative stability of the exchange rate has been ensured and preserved. Such stability has not been jeopardised even once during the past nine years, not even in the period of strong global turbulences.

Within nine years, the dinar has gained 0.9% against the euro and, at the same time, the NBS bought in the FX market EUR 3.2 bn net, of which EUR 745 mn in 2021. The NBS thus directly impacted on the increase in FX reserves (and financial security) of the Republic of Serbia in the healthiest way, since the purchase of foreign currency does not create any liability in the future.

The achievement and preservation of relative stability of the dinar was and remains crucial for the successful fulfilment of price and financial stability objectives (resolution of the NPL issue, a rise in dinar savings to record levels). All this gave full support to orderly public finance and more favourable conditions of government financing in the domestic and international market, while at the same time providing businesses and citizens with the certainty of doing business and planning.

Increased FX reserves and their reinforced structure are an important pillar of stability

According to the latest available data (4 August 2021), gross FX reserves reached a record level of EUR 14.7 bn, up by EUR 4.6 bn since August 2012. In the same period, net FX reserves more than doubled.

The structure of FX reserves has also been reinforced. To this end, the NBS headed by Governor Jorgovanka Tabaković has been increasing the share of gold in FX reserves for years already. Gold reserves today equal 36.7 tonnes – they made up 12.4% of FX reserves at end-July 2021, while in late 2012 they stood at 15.3 tonnes, i.e. they made up only 5.7% of total FX reserves of the country. Since end-2012 to date, they have increased by more than 21 tonnes (they more than doubled), while their value trebled – from EUR 0.6 bn to EUR 1.813 bn!

NBS significantly contributes to Serbia’s credibility in the international community

Numerous international financial institutions assess that the NBS pursues an adequate monetary policy. In raising Serbia’s credit rating a step away from investment grade, rating agencies quoted the results of the NBS as one of the important factors of the rating upgrade. Thus, as stated by Standard & Poor’s for a number of years already, the NBS has earned its credibility and proven its operational independence by the continuity of its results. They also assess that the exchange rate regime run by the NBS helps the economy successfully adjust to the movements in the international environment, and that the NBS interventions in the FX market contribute to preserving price and financial stability, growth of the country’s FX reserves to their record level and to a considerable lengthening of the maturity of dinar government securities.

The past nine years have also been marked by successful cooperation with the IMF. During that period, NBS Governor Jorgovanka Tabaković, serving also as Serbia’s Governor to the IMF, steered this cooperation towards building a partnership relationship, which is today the main feature of our country’s relationship with the IMF. By successful implementation of advisory, non-financial arrangements with the IMF through the precautionary Stand-By Arrangement (2015–2018), Policy Coordination Instrument (2018–2021) and the new 30-month Policy Coordination Instrument concluded in June 2021, Serbia sends a clear message to the international community that it pursues a credible development policy.

In November 2019, Mr Tao Zhang, the then Deputy Managing Director at the IMF, stated that the IMF was a witness to the success Serbia was achieving. “In the course of seven years, a not such a long period, Serbia has made a full turnaround in running the economy. It transformed its growth model – from growth based on unsustainable consumption, to the one driven by investment, exports and sustainable consumption growth. In Serbia, the central bank enjoys confidence and has a strong influence on the Serbian economy, while low inflation and a stable financial sector are an important support to sound public finance.”

The FDI inflow and an exceptionally low country risk premium as a reflection of overall stability – monetary, fiscal and political

The fall in the risk premium is another confirmation of the success of our economic policy. Nine years ago, Serbia’s risk premium was 250 bp above EMBI Global for dollar debt. Nine years later, Serbia’s risk premium has not only been reduced by around 420 bp, but is also around 180 bp below EMBI Global for dollar debt.

The environment of macroeconomic stability and favourable outlook is also conducive to FDIs whose inflow since early 2013 came at EUR 22 bn. These investments boosted productivity across a number of sectors, as well as wages and employment in the private sector. Thanks to their project and market diversification, FDIs helped to broaden the base of export products and markets and in the period since end-2012 Serbian exports doubled – from EUR 8.4 bn to EUR 16 bn in 2020 (the year affected by the pandemic), while this year they are expected to reach close to EUR 20 bn (an increase of around 140% relative to 2012). The greatest contribution to export growth comes from manufacturing, to which the major part of FDIs is channelled.

Greater use of the dinar and record-high dinar savings

Genuine progress has been achieved in financial system dinarisation – all dinarisation indicators rose significantly relative to end-2012, posting record high levels:

  • dinarisation of household and corporate receivables which stood at 38.6% at end-June increased by 10.6 pp (28% at end-2012)
  • dinarisation of household and corporate deposits which at end-June measured 38.7% doubled (by 19.4 pp) relative to end-2012 (19.3%)
  • the share of dinars in the composition of public debt increased by 10.9 pp, to 30.4%
  • the dinar yield curve was substantially extended – from five to twelve and a half years, through issuance of dinar government bonds, with high demand for longest-maturity securities.

Dinar savings have been on a continuous rise (22% in 2018, 30% in 2019, 17% in 2020 – despite the coronavirus pandemic) and have reached record high levels. In July 2021 they exceeded RSD 100 bn (RSD 100.5 bn). Relative to end-2012 they increased around 6 times.

All these are concrete confirmations of the greater use of the dinar in our financial system and hence the best proof of the growing confidence of citizens in the national currency and the central bank.

The NBS kept its leadership reputation in the segment of development of the domestic financial market. Immediately after the crisis broke out, we included dinar corporate bonds of domestic companies which met the appropriate criteria in monetary operations of liquidity provision to banks. That way we achieved two goals at the same time – we stimulated a more vibrant recovery of the domestic economy by creating an additional financing channel, and further improved the domestic capital market. Through issuance of dinar bonds domestic companies can achieve a series of advantages, such as lengthening the maturity of their liabilities and broadening the maturity range, diversifying the manner of financing, along with decreasing the currency risk of their financial sources.

Long-standing goal achieved – Serbia’s dinar bonds included in renowned J.P. Morgan index family

The goal strived for since 2015 was achieved in 2021 – Ј.P. Morgan, one of the world’s leading financial institutions, included on 30 June 2021 three benchmark issues of dinar government bonds among its renowned indices of local currency bonds issued by advanced and emerging economies. By inclusion in these indices, Serbia became more visible for a wide circle of international investors, which contributes to more favourable terms of financing of the government and the economy.

Already in late June and in the first days of July we felt numerous positive effects of inclusion of dinar bonds in Ј.P. Morgan indices. In July, trading in benchmark 7Y, 10Y and 12Y securities increased two to three times relative to June and significant demand led to a noticeable fall in yields on these securities already in the first days of their inclusion in the family of indices – compared to data from early June, yields on three benchmark dinar bonds fell in early July in the interval from 33 to 41 bp. The local market has also welcomed a number of investors appearing for the first time.

This is a success that we worked hard to achieve, a success that shows what kind of confidence Serbia has built in the international arena. This decision confirms the confidence foreign investors have in the sustainability of Serbia’s macroeconomic indicators, as well as in the sustainability of the implementation of responsible economic policies. The positive effects of this success are being felt in the domestic financial market as we speak – the demand for government dinar bonds included in the index has increased, leading to a significant rise in their market value“, said Governor Jorgovanka Tabaković on that occasion.

A safe card system, innovative services and more easily accessible, faster and cheaper services

  • The number of DinaCards has tripled relative to 2012;
  • We improved the national card system – DinaCard, by introducing a new technology (all newly issued cards are chip-based) and card functionalities (payment in instalments by a debit card instead of cheques and cash withdrawal along with purchase at all NIS Petrol and Gazprom petrol stations in our country).
    • The number of merchants enabling online purchases by DinaCard is increasing daily (currently, over 1,200 merchants). We have established excellent cooperation with international card systems UnionPay and Discover, thus further improving cross-border use of the national payment card.
  • We were among the first in Europe and worldwide to develop an instant payment system – the NBS IPS system, which enables citizens and corporates to make payments anywhere and anytime, with money being transferred to the payee’s account in merely a few seconds. We were the first in Europe to enable instant payments at brick-and-mortar and online points of sale, applying the Four Party Scheme.
    • In July 2021 we launched a new NBS IPS website: https://ips.nbs.rs, as a sort of a guide for instant payments, as the fastest, safest and state-of-the-art method of payment. The average daily number of transactions processed in the NBS IPS system is around 108 thousand payments, аnd since the launch of the NBS IPS system around 55.5 million transactions have been realised, worth in total over RSD 517 bn. The average number of transactions of households and corporates processed on a weekly basis in all six NBS systems is over 6.5 million.
  • We offered to households and businesses a simple model for payment of monthly bills by scanning of the NBS IPS QR code on bills issued by providers of utility and other services, via mobile banking applications.
  • We standardised the terminology and reports which banks issue to households and corporates in relation to payment services, while the NBS website offers data for easy and quick comparison of payment service fees of different payment service providers: https://ppu.nbs.rs/WebSite/.
  • Administrative procedures have been simplified in case a user decides to switch to a different payment service provider and every citizen has a guaranteed right to a payment account with basic features, including the use of digital payment services.
  • We enabled the conclusion of distance contracts by means of video identification of users. The number of distance contracts concluded in 2020 rose by 61.5% relative to 2019, while the number of contracts concluded using video identification increased by 100% in the same period.
  • We enabled support for start-ups in the development of payment innovations, via the mechanism for testing innovative solutions in the area of payment services – the so-called Regulatory sandbox, implemented in cooperation with the NBS.
  • The service Мy Data for My Bank that was offered in mid-July 2021 via the e-government portal, is the result of cooperation between the Government, NBS and banks. Instead of seeking data and documents needed for a loan application at numerous tellers of government institutions, citizens can now obtain them easily in electronic form, by two clicks.

Rise in cashless payments and lower fees for payment services

Relative to 2012, we have recorded:

  • the rise of 260.5% in the number of users who have been enabled e-banking;
  • the rise of 32.8 times in the number of users who have been enabled m-banking;
  • five to six times lower multilateral interchange fees – from the average of around 1% to 0.2% of the transaction amount;
  • merchant fees (which the merchant pays to the bank for accepting payment cards) have been halved – from the average of more than 2% to around 1% of the transaction amount.

Financial sector stability has been preserved and fortified

The fact that we have constantly improved the regulatory and supervisory framework for banks, which is now aligned with the best international standards and practices in all aspects, and equivalent to those of the most advanced European countries, has allowed us to focus all regulatory activities in the time of the coronavirus on supporting citizens and businesses.

We were among the first central banks in Europe to adopt regulations enabling a halt in the repayment of debtors’ liabilities – by way of two moratoriums we enabled facilities for all citizens and corporates at a time when they needed them the most in order to weather the crisis more easily. More than 90% and 80% of debtors accepted the first and the second moratorium respectively, opting for the pause in the repayment of their liabilities. Additionally, in December 2020, we adopted measures as support to citizens and corporates who were not able to settle their obligations to banks due to the COVID-19 pandemic. In 2020, the NBS also passed measures facilitating citizens’ access to household lending, primarily for first-time flat buyers, as well as other facilities.

The inherited issue of NPLs was also resolved – as a combination of a systemic approach and results achieved in the macroeconomic sphere. Bearing in mind the scope of this problem, i.e. the inherited share of NPLs at around 20% (one-fifth of banking sector assets), their cut to 3.6% by June 2021, despite the pandemic, is a result that has been recognized by all. Higher quality of banking sector assets means a greater possibility for healthy lending activity that supports economic growth and employment.

In December 2019, the European Commission confirmed that our supervisory and regulatory requirements are equivalent to European ones in terms of the treatment of exposures in accordance with the EU Capital Requirements Directive. Serbia is the only country in the region that is not an EU member, but is included in the list of countries eligible for preferential treatment of investments. Such decision by the European Commission means an additional level of confidence for investors and another incentive for the development of our dinar financial market. Lower requirements for certain investments by banks doing business in the EU may additionally stimulate longer-term and even higher investments in Serbia, which can boost employment and the quality of services.

FX and credit operations

Interest rates on credit debt of Serbian residents abroad have declined significantly over the nine years – the weighted average rate in the first six months of 2021 was 2.4 times lower than the weighted average rate in 2012, which yet again gives validity to the NBS’s activities taken so far and is an incentive for future projects.

By taking over the supervision of FX and exchange operations of residents and non-residents as of 1 January 2019, as well as the task of issuing and revoking authorisations for exchange operations, the NBS further expanded its competences in terms of preserving Serbia’s financial stability.

The NBS and the EU integration process – all chapters we lead have been opened

Commitment to Serbia’s EU integration was demonstrated by the NBS since the very onset of Serbia’s EU accession process in 2014. The NBS is part of 11 negotiating groups, which is the largest number of chapters where a central bank is involved. The decision that we lead the negotiations in key economic chapters – Financial services (Chapter 9) and Economic and monetary policy (Chapter 17), as well as that we should be the second-lead institution for chapters Free movement of capital and Statistics, with active participation in the work of seven other negotiating groups, gives the NBS an important position in the EU integration process, especially in the domain of macroeconomic and financial policies.

All chapters where the NBS is either the lead or the second-lead institution have been opened.

14/12/2015 11/12/2017 25/6/2018 10/12/2018 27/6/2019 10/12/2019
Chapter 32 – Financial control Chapter 6 – Company law Chapter 33 – Financial and budgetary provisions Chapter 17 – Economic and monetary policy
Chapter 18 – Statistics
Chapter 9 – Financial services Chapter 4 – Free movement of capital

The NBS also has an important role in preparing a strategic national document – the Economic Reform Programme, with an active participation of the Governor in the annual Ministerial Economic and Financial Dialogue between the EU and the Western Balkans and Turkey. During the Dialogue, the European Central Bank and the European Commission have continuously assessed that the NBS pursues an adequate monetary policy, aligned with the inflation targeting regime, and that with its measurers it has significantly fortified the financial system. In the latest dialogue in July 2021, they stated that, by responding timely and robustly, the NBS gave significant support to Serbia’s speedy economic recovery during the pandemic and to the preservation of overall stability.

Reform laws and regulatory solutions

Through a number of regulatory activities, we have enabled the following:

  • modernisation of payment services provision in the country and across the border, and higher competition in the payment services market (Law on Payment Services and amendments to the Law on Foreign Exchange Operations);
  • alignment, decrease and greater transparency of costs associated with payments made by citizens and corporates (Law on Multilateral Interchange Fees and Special Operating Rules for Card-Based Payment Transactions);
  • greater protection and improved position of financial service consumers (amendments to the Law on the Protection of Financial Services Consumers), particularly concerning the conditions of increased use of information and communications technologies (Law on the Protection of Financial Services Consumers in Distance Contracts);
  • creating an ecosystem for innovative solutions in the digital assets market and its proper development (Law on Digital Assets);
  • changing the framework for bank resolution which ensures a continuity of banks’ critical functions, with full protection of depositors and the least cost to the government (amendments to the Law on Banks);
  • introducing financial collateral in line with international standards in the domestic financial market, which improve legal safety and efficiency in settling obligations in the financial market, and lowers the credit and systemic risks (Law on Financial Collateral).

The NBS’s important legislative activities, in cooperation with other relevant bodies, have made room for the improvement of the legal framework governing the prevention of money laundering and terrorism financing, while taking into account the use of modern technology in the financial sector (e.g. regulating the procedure for video identification of clients).The NBS’s important role in this area has been confirmed by the highest grades in terms of the alignment with international standards which the relevant international institutions (FATF and Moneyval) gave not only to the regulations governing the operations of financial institutions supervised by the NBS, but also to the efficiency of their implementation.

We make the institution better through human capital, because without people there can be neither institutions nor progress

All of the important results achieved by the NBS serve one goal – to build a better and more prosperous country for us and our children. Striving towards this goal, we have undertaken perhaps the most important task: to build people. And that is why we remain open to the best, the young and the innovative, said Governor Tabaković.

Despite the increasing demand for talents in the knowledge-based market, we have succeeded in obtaining the best of them and being their first choice. We signed 15 memoranda on business cooperation with higher education institutions in Serbia and six memoranda with faculties from the Republic of Srpska. More than 600 students have had an opportunity to become familiarised with key operations of the central bank via internship. This year, for the first time, students at the University in Priština, temporarily located in Kosovska Mitrovica, have also had a chance to complement their theoretical knowledge, acquired during the studies, with practical work through our traditional summer internship. 

Our objectives are defined by law – price and financial stability, and support to the economic policy. Stability, which we have provided for nine years straight, brings benefits to everyone – citizens and businesses, importers and exporters, investors and consumers, and as such, stability is the key precondition for easier planning, high and sustainable growth, and a safe future. We remain the most reliable partner to our Government in the fight to further boost our economy and create stimulative business conditions for our corporates. It is up to us to ensure macroeconomic stability and an equal treatment of all investors, because we have no privilege or reasons to use any other criteria for comparison except the better living standard of our citizens and sustainable growth of our country. Investments diversified across countries and economic sectors are a guarantee of our objectives, which are written in the preambles of the most renowned and most important international institutions. Therefore, we continue to do our work as we have done so far – for the benefit of our citizens and businesses, which means by preserving stability and adopting and implementing measures that improve the daily lives of our people, Governor Tabaković concluded.

Governor's Office