NBS: Inflation down, dinar stable, gross FX reserves record-high

BELGRADE - In 2023, inflation was put on a sustainable downward path and will end the year at half of what it was at end-2022, the relative stability of the dinar against the euro was maintained while, at over 24.5 bln euros, gross FX reserves are record-high, the National Bank of Serbia (NBS) said on Thursday, recapping the results achieved this year.

"Gold as part of FX reserves was boosted further in 2023 - by more than 1 t, to the record-high level of almost 40 t. In 2023, dinar savings reached and then exceeded the equivalent value of 1 bln euros, posting the most dynamic annual growth so far. FDI inflows are set to exceed the projected figure and remain close to the record level from 2022," the NBS said in a statement.

"Aiming to preserve financial system stability and protect financial services consumers, we adopted measures temporarily capping interest rates on housing loans.

The NBS’s supervisory activities generated a material effect of 3.1 bln dinars for financial services consumers, while in individual procedures under complaints it amounted to around 34 mln dinars, and in mediation procedures to 5.2 mln dinars.

Despite headwinds from the international environment, rating agencies kept Serbia’s rating unchanged, with a stable outlook. Standard & Poor’s and Fitch have kept Serbia’s rating at a notch from investment grade," the central bank also said.

“Behind us is another year riddled with challenges. Our key task was combating inflation, which posed a challenge at a global level. We succeeded in establishing a strong downward trajectory and halving inflation, which we achieved by gradual and well-calibrated monetary policy tightening, taking care not to jeopardise financial stability, as well as to ensure continued GDP growth," NBS Governor Jorgovanka Tabakovic said.

"By maintaining the stability of the dinar exchange rate, we limited the spillover of import price growth onto domestic prices, thus contributing to overall macroeconomic stability. The stability of the local currency has been a trademark of the National Bank of Serbia for more than a decade. Going forward, all of our efforts will be focused on preserving stability - by resorting to all measures in our competence, to help ease the business conditions for corporates, create more jobs and enable a better life for all of our citizens," Tabakovic added.