Head of the International Monetary Fund's Mission in Serbia Albert Jaeger believes that inflation will start to drop in coming months, estimating that the current fluctuations in the exchange rate are normal and that the National Bank of Serbia (NBS) should only intervene if they become extreme.

Exchange rate fluctuations are normal under the current foreign exchange regime and the NBS should only intervene in case of significant daily fluctuations, Jaeger told the Thursday edition of the Belgrade daily Vecernje Novosti.

He pointed out that high inflation is a major problem, but expressed hope that it will drop considerably in coming months, as the Serbian currency strengthens and global food prices normalize.

As far as food prices, Jaeger noted that the market should be allowed to play a bigger role, because it generally has a stabilizing effect on food prices and that the government can help through investments, more rational use of commodity reserves and its influence on trade and customs barriers.