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Monetarna politika | Strategija i ciljevi monetarne politike

Monetary Policy Objectives for 2004

Pursuant to the monetary policy measures already in place, in the previous year the National Bank of Serbia has managed to achieve the key performance objectives: firstly, lowering of inflation, maintenance of the relative stability of the domestic currency, increase of foreign currency reserves, gradual increase of money supply (remonetisation), lowering of discount rate and strengthening of open market operations.

In line with the Monetary Policy Programme for 2004 , the National Bank of Serbia set as its chief objectives for the year 2004 the following: further curbing of inflation level down to 7% annually, maintenance of a stable financial system and increase in the net foreign currency reserves of the banking sector by approximately USD 150 million.

Amended Monetary Policy Programme for the second quarter of the current year envisages annual inflation of 8.5% (December 2003 to December 2004).

The dinar exchange rate will remain within the managed float regime and would be determined in line with the principle of supply and demand on the foreign exchange market. The National Bank of Serbia would continue to intervene on the foreign exchange market in order to help bring the dinar exchange rate in line with the sustainable mid-term balance of payments position of the country, but always bearing in mind the chief objective of further lowering of the inflation level, with simultaneous gradual strengthening of the role of interest rates as an important monetary policy instrument.

The Programme envisages a reserve money growth of 9%, growth of money supply M2¹  by approximately 14%, and growth of more broadly defined money supply, M3², by app. 15%. The projection of the monetary aggregates relies on the assumption of a relatively unchanged level of foreign trade balance deficit and lower foreign capital inflow in 2004. In case that net foreign currency inflow should show signs of divergence form the projected lines, the monetary policy would be adjusted to apply to the new circumstances.

The National Bank of Serbia will continue to strengthen the indirect monetary policy instruments, including the introduction of repo transactions. Also, continuous efforts will be invested into the further development of financial markets.

Supervision process over banks’ solvency and legality of banking operations will also be continually upgraded both in banks and other financial organizations, all in line with the international standards. Further regulation, development, monitoring and supervision of the dinar payment operations performed by banks will also play an important role in an effort to secure a safe and financially sound banking system.


¹  M2= M1 + dinar deposits
²  M3= M2 + foreign currency deposits