Serbia's position in the world is better than before the economic crisis in 2008-2009 as a result of a smaller current account deficit, stronger home currency and a satisfactory size of the foreign exchange reserve, the International Monetary Fund (IMF) has stated, adding there is a hightened risk of the region's crisis spilling outwards, the National Bank of Serbia (NBS) has announced.

The country's economic programme aims to preserve the macroeconomic and financial stability in an unpredictable global and regional environment during 2011 and 2012, the NBS stated.

Such a programme is supported by the new Stand-By Arrangement with the IMF, which totals 935.4 million in special drawing rights (around EUR 1.1 billion) over a course of 18 months, which the IMF board of directors approved September 29.

The arrangement was set up out of precaution, meaning that Serbia does not intend to use the funds unless the balance of payments requires it. The programme is going to improve Serbia's investment climate, and the funds can also help protect the economy from risk and negative outside influence, according to what was said at the meeting.

The IMF described Serbia's monetary and currency policy as suitable, adding that lower inflation pressure could allow for looser monetary measures. However, Serbia should continue to run a cautious monetary policy in order to bring the inflation back inside the projections set by the NBS, the IMF noted.

In accordance with the new arrangement, the NBS will continue to harmonize its framework related to regulations and supervision with proven international practice in an effort to have the Basel II framework enter into force in late 2011.