Jelasic: International context of Serbian currency weakening

Belgrade June 21. 2010. (Serbia Today) - Outgoing NBS Governor Radovan Jelašić says the weakening of the Serbian dinar was the result of events in the international arena. The slide was also influenced by the weakening of domestic currencies in Hungary, Poland and Turkey, he disclosed. “If the dinar depended solely on the situation in Serbia, it should be strengthening to a certain extent because we have signed an agreement with the International Monetary Fund, additional funds have been provided, salaries and pensions are frozen, and prices are stable”, Jelašić opined during the presentation of the latest issue of Kvartalni Monitor (Quarterly Monitor) magazine. “The foreign exchange market is stable, too, so if we look only at the events here, they are positive, but obviously everything that comes from abroad is prevalent at the moment, which is why there was a certain weakening of the dinar in the recent period”, the governor said. “I am convinced that if we manage to continue with implementing the restrictive policy, we should see a somewhat stronger dinar, but things do not depend only on our internal conditions, as the dinar is now largely tailored by external factors”, he said.  The NBS foreign exchange reserves of around EUR 10.7 billion are sufficient to prevent any major fluctuations in the daily exchange rate and provide enough transactions on the interbank foreign exchange market, but the exchange rate will still be determined according to the situation on the market, said Jelašić. After the Thursday NBS intervention of EUR 80mn, the dinar ended its six-day slide against the euro and strengthened by 0.46 percent, so the official exchange rate on Friday was RSD 103.4627 for one euro.