“Role of NBS council won’t change”

Belgrade, April 23. 2010 (Source: B92) - NBS Council President Dejan Šoškić said that there would not be changes made to the level of the council’s authority. Šoškić, who is candidate for the position of NBS governor, spoke in Belgrade on Tuesday to say that there were “many different solutions for the new NBS law,” but that officials are no longer considering changing the role of the council by giving it more powers. This means that there would not be any authorities taken from the Monetary Committee and given to another body of the central bank that has more members, Šoškić said. He added that the central bank and government officials should be allowed to adopt the new law for the National Bank of Serbia first. Asked when he is expected to be officially elected as the new NBS governor, Šoškić said that the amendments for the NBS law must be drafted first, adding that it was hard to tell when this would be completed. Šoškić also commented on the introducing of measures which enable the citizens to obtain loans from commercial banks under more favorable conditions as “justified”. During an break in the International Accounting Standards (IAC) seminar, Šoškić said that the current market demand in Serbia has dropped compared to the previous period, and that this situation has opened possibilities for implementing instruments such as loans which allow a somewhat greater level of indebtedness and simplify the procedure for obtaining loans. “This measure is justified if there is no imminent danger of inflation in the next period, but if the situation should change - and there are signs already that the deflation will not last long - then every measure should be closely inspected”, Šoškić said. Šoškić reminded that monetary policy has for some time now been subject to relaxing, and that the NBS has decided on several occasions to reduce either the referent interest rate or the mandatory state reserves, and added that such policy is likely to persist, since there is no magic formula which the state could use. The instruments which can be used are quite clear, and so are the expectations from monetary policy - stability of prices and improvement of Serbia's economic growth, Šoškić pointed out.