17.08.2006.

Foreign Exchange Demand and Supply to Play a Crucial Role in Setting the Exchange Rate

Once again this year the National Bank of Serbia was compelled to intervene in the Interbank Foreign Exchange Market meeting by purchasing euros in the amount of USD 103.1 million so as to preclude stronger appreciation of the dinar exchange rate. Today’s official middle exchange rate was set in the IFEM meeting at 81.50 dinars per euro.

The National Bank of Serbia will remain watchful and act to preclude any serious fluctuations of the exchange rate in the future. It is important to note though, that the National Bank of Serbia shall not quell the tendencies that have as of recent led to the strengthening of the dinar either. The price of domestic currency will be determined by foreign exchange demand and supply.

The strengthening of the dinar only goes to confirm what the National Bank of Serbia has been telling the citizens for some time – that dinar investment is the safest one. The NBS advice to all citizens having some extra dinar funds would be to invest them into any form of dinar savings so as not to expose themselves unnecessarily to foreign exchange risk and currency conversion costs.

Press Release from Governor’s Cabinet