Governor Tabaković participates in 44th meeting of Central Bank Governors’ Club of Central Asia, Black Sea Region and Balkan Countries

05/11/2020

Governor Tabaković participates in 44th meeting of Central Bank Governors' Club of Central Asia, Black Sea Region and Balkan Countries

NBS Governor Jorgovanka Tabaković participated today in the virtual 44th meeting of the Governors' Club, which in addition to central bank governors of Central Asia, Black Sea region and Balkan countries gathered representatives of the Bank for International Settlements (BIS), International Monetary Fund (IMF) and World Economic Forum.

The participants assessed that the macrofinancial policy mix implemented by governments and central banks was critical in responding to the shock in the initial stage of the pandemic, but that uncertainties remain as to the further spread of the pandemic.

They also concluded that central banks played a huge role in preserving economies from the fallout of the COVID-19 pandemic, and that countries that had built robust banking sectors in the run-up to the crisis were able to provide greater support. Countries where central banks were successful in maintaining monetary stability before the pandemic were also able to afford a more sizeable response to the crisis.

'The Serbian central bank lowered the key policy rate by 50 bp at the very start of the crisis, and looking at 2020 to date - by a total of 100 bp, to the record low 1.25%. By compensating a part of the interest rate, the NBS gave an additional incentive to even more favourable dinar loans within the Guarantee Scheme for entrepreneurs, micro, small and medium-sized enterprises. The NBS also adopted numerous other measures in order to support liquidity and lending. As a result of the applied measures and preserved stability, for the first time in Serbia interest rates on dinar and euro-indexed corporate loans have converged to similar levels, which will translate into higher dinarisation as time goes by', noted Governor Tabaković.

'In a coordinated move, we adopted large packages as soon as the crisis emerged. Measured by the scale and speed of the response, Serbia is among the countries that provided the largest support to its people and businesses. We have preserved the economy and stability. Inflation in Serbia has been kept low and will stay under the NBS's control going forward. The NPL share of 3.4% at end-September is the lowest level of this asset quality indicator since its monitoring began. Growing at the average annual rate of 25% since 2013, dinar savings increased even in crisis conditions to over RSD 90.0 bn. In the year to date, they gained more than RSD 10 bn and FX savings more than 4%. Despite rampant uncertainty in global markets, the exchange rate of the dinar against the euro has been kept stable. And we were able to maintain stability because in the period 2017-2019 we bought EUR 5 bn net in the FX market. Thanks to this, we readily entered this unprecedented crisis and maintained the confidence needed for the normal functioning of the domestic economy during the pandemic', underlined Governor Tabaković.

Governor's Office