29.04.2004.

Governor of the National Bank of Serbia on the Dinar Exchange Rate

'In the course of the negotiations with IMF, the current dinar exchange rate policy was confirmed once again, which means that under no circumstances could the exchange rate of euro reach 80-dinar level by the end of the year’, said Radovan Jelasic, Governor of the National Bank of Serbia, replying to the misinformation aired recently by some domestic media.

Governor Jelasic pointed out that the activities undertaken with a view to strengthening the public confidence in the domestic currency, as well as the National Bank’s adherence to the floating exchange rate regime rule out any possibility of one-off devaluation of the domestic currency.

Governor also stressed that the National Bank of Serbia would continue, as was the case so far, to determine the dinar exchange rate in line with the inflation rate in Serbia as well as ratio between US dollar and euro. An additional aspect in determining the dinar exchange rate would be the competitiveness of domestic economy.
‘When it comes to speculations about the possible changes in the dinar exchange rate, it is important to stress that bilateral negotiations on this subject are held exclusively between the IMF Mission Heads and the Governor of the National Bank of Serbia, - as was the case during the latest talks in Washington, - which means that no member of the Serbian negotiating team may claim to have the information neither on the topics of the talks nor on the dinar exchange rate movements until the end of the year’, Governor said.

Governor also noted that the competitiveness of the Serbian economy could not be improved in any significant manner through exchange rate policy measures, since competitiveness and export volume do not depend chiefly on price-related factors, but on productivity and quality of export-oriented domestic products.

That is why the National Bank of Serbia believes that the exchange rate policy can only support and by no means replace the non-price related factors that determine the competitiveness level of the Serbian economy.

Press Releases from the Governor's Office