The Executive Board of the International Monetary Fund (IMF) said today that it approved to Serbia a €1.1 billion stand-by arrangement for a period of 18 months.

The statement from the IMF says that the new arrangement, made as a precautionary measure, supports the economic programme of the Serbian government, which wants to maintain macroeconomic and financial stability in the country.

The Serbian authorities will use these funds if needed, which means that they will not withdraw the money unless necessary.

Jaeger says Serbia prepared to deal with new crisis
Serbia is rather well-prepared to deal with a potential new economic crisis, and the country's deficit is considerably lower, the exchange rate is more stable, and Serbia also has foreign exchange and fiscal reserves and a stand-by arrangement, Head of the International Monetary Fund (IMF) Mission to Serbia Albert Jaeger stated.

In an interview for the Belgrade-based daily Danas, he said that the country's external deficit is far lower that it was back in 2008, when it totalled over 20 per cent of the BDP.

The exchange rate was adjusted since 2008 and is now by far more favourable, Jaeger said and Serbia now still has relatively high foreign exchange reserves and a well-capitalised and highly solvent banking system, which means that Serbia does not need to be extremely concerned, while fiscal cash reserves following the issue of USD 1 billion worth of bonds can maintain the financial market in place.

The IMF representative recalled that the stand-by arrangement is still in force and although it was closed out of precaution, it can still be used if the situation starts deteriorating.