emg home
NATO Sec-Gen: No change in Alliance position over FYROM 56th Technics Fair opens in Belgrade Greece: New proposal leads to further party talks on Tuesday FX reserves EUR 10.38 billion at end-April Bugarin: Brave govt to implement necessary reforms Belgrade for just conclusion to Kosovo conflict Moscow: Kosovo basis for training Syrian rebels U.N. Security Council holds session on Kosovo US and Bulgaria’s ambassadors start on a business road show in USA Bulgarian Holding starts regional expansion with solar park in Macedonia Bevanda: To create space for direct foreign investments in BiH from Turkey Croats go crazy for on-line shopping Croatian inventors win awards at European exhibition Serbia should complement Europe's wine offer Turkey: Otokar signs 17.1 mln deal with Defence Industries Ford starts EcoBoost engine production in Romania Metro, ISAP hold stoppage Tuesday PM Gruevski: Chinese companies to enter European markets via Macedonia EU: Protests in Macedonia should stop, authorities to be left alone to do their job IAEA begins new nuke talks with Iran focusing on suspected weapons work Macedonian Government issues EUR 10 million emission of denationalization bonds Conference on process of planning and decision-making in modern military operations STEAG to invest 200 million euros in Monsson Group's Crucea Nord wind farm project Romania: 188 TV channels, 142 radio stations to run local election campaign Black market labor up in Romania, 2.3 mln people working without labor contract Cooperation of all civil society elements to prevent spectator violence Greece: Council of State approves presidential decree protecting island wetlands Picasso exhibition has attracted 13,000 visitors Roughly one third of Greeks over-qualified for their jobs, figures show Greece: Apartment prices down 9.3 pct in Q1
RSS

Investors hold back, dinar keeps slumping

10. May 2012. | 07:33 07:34

Source: Tanjug

The dinar's drop against the euro since the start of the year is the result of a chronic lack of foreign currency in the ordinarily "shallow" market, which is augmented by investors holding back because of uncertainty in Serbia and the eurozone, economists told Tanjug on Wednesday.

The dinar's drop against the euro since the start of the year is the result of a chronic lack of foreign currency in the ordinarily "shallow" market, which is augmented by investors holding back because of uncertainty in Serbia and the eurozone, economists told Tanjug on Wednesday.

Professor of the Belgrade Faculty of Economy Djordje Djukic said the dinar's drop was caused by past problems, meaning the fact that Serbia spent more that it produced, but also because of current problems in the neighbourhood and the eurozone, which is in recession, apart from Germany.

Investors fear, not so much the situation in Serbia, but the outcome of the eurozone crisis, particularly in Greece, as well as "the fact that keeps becoming clearer, that the healthy core of the eurozone is going to separate," he noted.

"That indicates that investors will be too cautious about the markets like Serbia, so I do not expect a large inlux of direct foreign investments, and the supply of foreign currency will automatically drop," he stated.

With the low economic growth rate, which will probably be close to zero this year, everything says the pressure weakening the dinar is getting stronger," Djukic added.

"Only resolute steps by the new government, in line with what the IMF is probably going to insist on, and it is my belief they will now be much stricter, in view of the deteriorated economic situation, particularly in the south of Europe, will be the main signal to which the foreign exchange market will react, either by weakening the dinar further of stopping at this level," Djukic explained.

Professor of the Belgrade Banking Academy Zoran Grubisic said the dinar would continue to drop against the euro in the long run, with occasional fluctuations.

According to Grubisic, EUR 3.3 billion of Serbia's foreign debt will mature this year, and more than EUR 3 billion in each of the next two years.

He expects the central bank to continue its occasional and mild interventions on the foreign exchange market to sustain activity and liquidity on the market.

That market has been pretty "shallow" in the past month, probably because of uncertainty regarding the elections and arrangement with the IMF, meaning the new government and budget review, he said adding that those were all unknowns that caused investors to hold back.

The new government should reach an agreement with the IMF as soon as possible to continue the precautionary arrangement with that institution, which would be a good signal to the market, Grubisic stated.

Share:

Del.icio.us
Digg
My Web
Facebook
Newsvine

Enter text:

<<

14. May - 20. May 2012.

>>
MON
14
TUE
15WED
16
THU
17FRI
18SAT
19SUN
20