16/07/2026
Honourable Members of Parliament, members of the Committee on Finance, State Budget and Control of Public Spending,
Before you are the NBS reports for 2025.
These reports contain a wealth of data and an overview of the measures and activities undertaken by the NBS. The question we should answer today is a simple one: has the NBS fulfilled the purpose for which it exists? Have we preserved the value of money, safeguarded savings, maintained the stability of the financial system, and enabled citizens, businesses and the government to plan under conditions that have been anything but straightforward?
The NBS enjoys both de facto and de jure independence in selecting the instruments and policies required to achieve the objectives prescribed by law. For us, however, that independence is not a licence to operate beyond scrutiny. It is an obligation to make decisions professionally, promptly and responsibly. Accountability means clearly demonstrating to the National Assembly and to the public the results of those decisions. This Committee has the right to ask questions, and we have the duty to respond with data and results.
I do not ask you to assess the performance of the NBS on the basis of our words, but rather on the basis of what is measurable: inflation, the exchange rate, FX reserves, interest rates, savings, lending activity, the soundness of the banking sector and the protection afforded to citizens.
Honourable Members of Parliament,
The year behind us, covered by these reports, was marked by serious shocks. Geopolitical and trade tensions among the world’s leading economies, sanctions imposed on the Oil Industry of Serbia (NIS), instability in the energy and financial markets, as well as socio-political developments within the country, all weighed on investment decisions and heightened uncertainty.
Nevertheless, even under such circumstances, Serbia retained its credit ratings with all three leading rating agencies, including the investment-grade rating awarded by Standard & Poor’s in 2024. The reports of all three agencies conclude that high FX reserves, the relative stability of the dinar exchange rate against the euro, sustainable public finances and a stable banking sector confirm the continuity of an economic policy pursued consistently, responsibly and with a clear sense of purpose.
For that reason, today I shall focus primarily on results – on what is measurable, on what citizens and businesses have been able to experience directly, and on what has strengthened Serbia’s capacity to respond to new risks.
We have also preserved the credibility of monetary policy, which is measured not by the number of press releases issued, but by whether market participants trust that inflation will remain under control. The data show that we have justified that confidence!
With regard to our monetary policy response, in an environment of heightened inflationary risks we assessed that the key policy rate of 5.75% was appropriate. And let me be clear: our decisions to keep the key policy rate unchanged do not reflect either caution born of fear or inertia. By maintaining the key policy rate at this level, we preserve the restrictive stance of monetary policy and the room to respond should risks materialise.
A central bank’s resolve is not demonstrated by the number of changes in its policy rate, but by acting at the right time. The decision to keep an instrument unchanged is an active decision, based on a careful assessment of risks and the medium-term projection.
At the same time, interest rates on dinar loans to corporates declined further in 2025 – by 0.7 pp, to 6.2%, while rates on loans to households fell by 1.8 pp, to 8.1%. This reflected the effects of our past monetary policy easing in 2024, competition among banks and the statutory interest rate cap for household loans.
We also supported the Government’s housing loan programme for young people, while banks, in line with our supervisory expectations, offered more favourable lending conditions to lower-income employees and pensioners. As a result, lending to corporates and households grew by 15.4% in 2025, accelerating further to around 17% y-o-y in June this year.
The sanctions imposed on NIS and psychological factors generated depreciation pressures in the FX market. We did not allow short-term nervousness to turn into lasting instability. In 2025, we net sold EUR 580 mn in the FX market, making it the first year since the pandemic 2020 in which we were net FX sellers. We were not defending a number on the exchange rate list. We were safeguarding the value of loans, wages, income and liabilities. We made planning easier for corporates and reduced financing costs and risks for the Government.
At the same time, even during periods of heightened global uncertainty, we maintained a high level of FX reserves, which remained above all relevant adequacy criteria. Let me also recall the period when we were purchasing substantial amounts of foreign exchange to strengthen the country’s reserves, when some questioned why Serbia needed such sizeable reserves. The answer came at the end of 2025.
Reserves are built up in good times so that, in difficult times, the country has the means to safeguard stability, rather than having to rely on external assistance and conditions imposed by others.
At end-2025, Serbia’s gross FX reserves amounted to EUR 29.0 bn, covering 6.7 months of imports of goods and services. We also purchased 4.4 tonnes of domestically produced gold, bringing total gold reserves to a record 52.5 tonnes, worth EUR 6.2 bn and accounting for 21.4% of total FX reserves. As at June this year, our vaults hold 54.6 tonnes of gold.
Let me therefore repeat: gold and FX reserves are not a matter of prestige. They provide the country with security and the ability to make its own decision in difficult times, in line with its own interests. Their purpose is to provide the country with liquidity, confidence and timely actions whenever international markets become unstable.
A stable banking system is not one that is never exposed to risk. It is a system that has sufficient capital and liquidity, effective supervision, and the capacity to absorb risks while continuing to finance corporates and households.
As a responsible supervisor, we safeguard both the system and those who operate within it responsibly.
No bank is above the rules, and no commercial interest is above the trust of citizens. Our objective is a regulatory framework that is sufficiently strict to prevent irresponsible conduct, while remaining sensible enough not to stifle sound business operations and growth.
For this reason, in March last year, upon the proposal of the NBS, the National Assembly adopted a package of laws further improving our regulatory and supervisory framework.
The new Law on the Protection of Financial Service Consumers introduced interest rate caps on all household lending products.
The Law Amending the Law on Banks further strengthened the supervisory mechanism and established the Bank Resolution Fund, thereby enhancing financial stability and safeguarding public funds. A system in which citizens do not understand contractual terms, cannot effectively exercise their rights, or lack confidence in institutions cannot remain stable over the long term. Protection of financial service consumers is no longer a mere complement to financial stability – it is its integral and essential part.
As I often emphasise, technology is not an end in itself. In the financial system, its value is measured by whether it makes payments cheaper, faster, safer and more accessible for households and corporates.
At the same time, we have strengthened the supervision of e-money institutions and virtual currency service providers, as well as the mechanisms for the prevention of money laundering, terrorism financing and financing the proliferation of weapons of mass destruction. The development of new services must go hand in hand with the strengthening of risk control mechanisms, because a new service that is fast but not secure enough does not represent progress, but a new source of risk.
Another very important achievement is reflected in the findings of Moneyval’s sixth round of evaluations. Serbia was placed under the regular follow-up regime, which is the best outcome possible. The results in the areas falling within the remit of the NBS are especially significant, confirming that the enhancement of the supervisory framework was not merely a matter of formal alignment, but a change that has delivered measurable results.
What I have spoken about today are the four pillars and directions of our action and development. I recently noted that the public tends to reduce the role of banks to lending and interest rates, and that of the NBS – to maintaining dinar exchange rate stability. Yet, our roles in economic life are both broader and deeper than that.
Serbia has also successfully completed three reviews under the non-financial Policy Coordination Instrument with the IMF, in which the NBS played a significant role. According to the IMF Executive Board, a broadly aligned external position, moderate public debt, high international reserves, and a well-capitalised banking system are Serbia’s strong economic fundamentals. This assessment is shared by long-term investors in our country who point out that they do not need rating agencies’ scorecards in order to recognise Serbia as an investment-grade economy!
We have also continued to upgrade our medium-term projection models, big data collection and processing techniques, and our inflation nowcasting model. We know that high-quality and reliable data are an important precondition for sound decision-making, but also that models can never replace the people who are accountable for every decision they make. Those people are before you today – at least some of them – and I have the privilege of being at their helm.
I would now like to briefly turn to developments so far in the year, as they shape the room for our future decisions.
Global uncertainty has not diminished, and new shocks continue to underscore the importance of the reserves we have built up and the resilience we have strengthened over the past years. The escalation of the Middle East conflict has pushed up energy prices, heightened risks to supply chains and augmented market volatility.
Serbia cannot determine the global price of oil, nor can it prevent disruptions in international supply chains. It can, however, prevent every external shock from spilling over into domestic inflation, exchange rate instability and a loss of confidence. That is what reserves, credible policies and swift coordination among institutions are for. And that is what distinguishes a vulnerable economy from a resilient one.
Even in such an environment, y-o-y inflation in Serbia slowed to 2.7% in June, effectively returning to its pre-energy-shock level. Government measures aimed at ensuring a stable supply of energy products and curbing a stronger increase in petroleum product prices by trimming excise duties on fuel, together with our monetary policy and transparent communication, prevented the shock from spilling over to other prices and inflation expectations.
Moreover, even four months after the expiry of the government decree capping trade margins, there have been no significant price adjustments for the products covered by the decree. Since November 2025, y-o-y food price growth has remained in negative territory, with food prices in June 3.7% lower than a year earlier.
In terms of economic activity, first-quarter real GDP growth reached 3.2% y-o-y, exceeding our preliminary estimate by 0.2 pp. Growth was driven primarily by the services sectors, while agriculture also made a positive contribution. Real-sector indicators for April and May likewise point to favourable developments. For 2026 as a whole, we project real GDP growth of 3.0%, while in 2027 it is expected to step up to 4.5%, propped up by the investment cycle and the hosting of “Expo”. Over the medium term, we expect the Serbian economy to grow at a stable pace around its potential level of about 3.5% per annum.
The export sector also demonstrated a high degree of resilience despite subdued demand from the European Union and the region. After rising by 8.7% in 2025, goods exports increased by 8.0% y-o-y in the first five months of 2026, driven primarily by manufacturing exports, which rose by 8.6%. Within manufacturing, exports of branches associated with the automotive industry stand out in particular.
With goods imports increasing by only 2.7%, driven by imports of intermediate goods, and with both primary and secondary income contributing positively, the current account deficit narrowed to EUR 560 mn, which is almost 70% lower in y-o-y terms. Over the same period, the net FDI inflow fully covered the current account deficit.
And before I thank you for your attention, I would like to share one more important piece of information. Although the NBS is not a profit-oriented institution and our success is not measured by the financial result, responsible resource management is nevertheless our obligation. Guided by this principle, we achieved a positive operating result of RSD 211.8 bn in 2025 as well. In accordance with the Law on the NBS, out of the operating profit worth RSD 48.1 bn, 70% or RSD 33.7 bn will be transferred to the budget of the Republic of Serbia, 10% will be allocated to core capital and 20% to special reserves.
Esteemed members of parliament,
I started my address today by asking the question: has the NBS achieved its legally mandated objectives? The reports before you provide a clear answer.
None of this should, however, be taken for granted.
My first message is that stability is a key precondition for sustainable and inclusive development. Those who are unwilling to help preserve it are harming their own country. Those who support us in this endeavour are helping everyone.
The second message is that resilience is not built once the crisis has begun. By then, it is already too late. It is built much earlier – through reserves, capital, sound regulations, our own payment infrastructure and trust that is earned over many years.
The third message is that we will continue to base our decisions on data and on what is in the interest of Serbia. We will not delay action when a response is needed, but neither will we squander the country’s trust and reserves to create a short-lived illusion that risks do not exist.
And we are ready to explain every decision we have made – what we did, why we did it and what we have thereby preserved for our citizens, businesses and the state.
That is the essence of central bank independence. And it is also the measure of our accountability before the National Assembly.
Thank you. We remain at your disposal for any questions and a well-argued discussion.
Governor’s Office
