Change in Dinar exchange rate regime not considered by NBS

Veselin Pjescic, vice governor of the National Bank of Serbia (NBS), said Wednesday (6 February 2013) that the possible introduction of fixed exchange rate called for a change in the monetary strategy, which was not being considered by the central bank at the moment.

Pjescic said at a press conference on current monetary and macroeconomic trends that the fixed exchange rate regime was not compatible with the target inflation regime applied by the NBS.

- Fixed exchange rate implies tight fiscal policy. With a tight fiscal policy, Serbia would not even have a need for a fixed exchange rate - said the vice governor.

Pjescic also noted that from the aspect of theory, each of the FX exchange rate regimes had its strengths and weaknesses.