The NBS sold yesterday EUR 40 million to prevent excessive daily volatility of the exchange rate of the dinar against the backdrop of increased demand and the exchange rate stabilized at RSD 102.04 per EUR 1.

This week alone, NBS sold EUR 180 million on the foreign exchange market, and EUR 836.5 million since the beginning of the year.

President of the NBS Council Dejan Šoškić says a reasons for the dinar sliding to over 100 for one euro are the ratio between supply and demand.

Another, the candidate for the next central bank governor added, is the fact that Serbia has no competitive export-oriented economy and is not attractive enough for direct foreign investments.

Šoškić believes that there is a possibility that the supply of dinar and demand for euro in the domestic market is partly caused by the expectation that the crisis epicenter in the eurozone will have negative effects on its immediate surroundings.

Šoškić expects the current talks with IMF officials concerning the ongoing stand-by arrangement worth a total of EUR 2.9bn to be successful, and says that if Serbia were to increase public sector salaries and pensions, the country would “likely lack money for planned public investments in infrastructure”.