National Bank of Serbia (NBS) Governor Dejan Soskic said on Monday Serbia's banking system was stable, the inflation was dropping and that the inflation rate would stay within the target range of 2.5-5.5 percent throughout the year.

Speaking at a conference entitled Financing Growth in Serbia, Soskic stated the lowest inflation was expected in April and added that the December inflation was 7 percent.

The prices of agricultural food products are stable, which was influenced by government measures, he pointed out, adding that future inflation should be limited by the positive effects of agricultural production.

There could be risks coming from the surrounding countries and the international market, but if everything is done in line with the fiscal law, there should be no negative effects, he noted.

According to Soskic, the banking sector in Serbia has a high level of liquidity and capital and is increasingly turning to long-term financing, while short-term financing is on the drop.

He pointed to the effects of dinarization, which, if increased, will affect the stability of the economic system and higher employment rate.

Serbia's financial stability will not be threatened in any way, and there is no need for new measures, he concluded.