Minister of Agriculture and Trade Dusan Petrovic and Governor of the National Bank of Serbia (NBS) Dejan Soskic have expressed expectations that certain stabilization of the Serbian dinar against the euro could take place and denied that there has been any pressure by the government and the president's office regarding the exchange rate.

It is not unusual for a governor to have meetings with the president of Serbia and the government, and nothing was required of the NBS at the last such meeting. We only discussed expectations and the monetary policy, Soskic said in a broadcast by B92 late Sunday.

He pointed out that bad news such as the postponement of the arrangement with the IMF and the withdrawal of the U.S.
Steel from the Serbian market caused certain reserves with investors and affected the foreign exchange market, but added that there is no more uncertainty on the market and that Serbia's EU candidate status is positive news.

According to Soskic, the weakening of the domestic currency has affected a part of citizens and the economy with obligations in foreign currencies, as well as exporters, while the most healthy part of the economy, importers, who use "domestic inputs" and domestic workforce, have benefited from it.

The governor said that the dinar dropped between 4.3 and 4.5 percent in the past two months, which is not unusual for a fluctuating exchange rate, and added that the NBS does not have the mandate to fix or defend a certain level of the exchange rate.

He noted that the preconditions for the introduction of a fixed exchange rate are the removal of foreign trade and budget deficits, as well as the removal of the public debt growth, and added that a premature introduction of the fixed rate implies financing from foreign reserves and poses a higher risk of being affected by external economic crisis.

Petrovic denied that the president and the government exerted pressure on the NBS governor to stabilize the dinar, and added that this construction has nothing to do with reality.

As Vice-President of the Democratic Party, Petrovic said that the movements in the dinar exchange rate and its curbing are not connected in any way with the next elections.

He expressed belief that the exchange rate will be stabilized, according to the export of agricultural products and food, where "things are very well," as well according to domestic and foreign investments in Serbia, which are made continuously.