Director General of the Sector for Monetary and Foreign Exchange Operations at the NBS, Nataša Radić, said in an interview with Radio-Television of Serbia that they expect inflation to reach its peak already during the first quarter of this year, while it should return to the target range in the middle of next year.
In January, Serbia’s foreign exchange reserves reached a record, almost 21 billion euros, which covers six months of imports of goods and services. Serbia has close to 40 tons of gold in reserves, which guarantees security for the economy and depositors. On the other hand, interest on savings is still below the inflation level, while new loans are becoming more expensive.
Director General of the Sector for Monetary and Foreign Exchange Operations at NBS, Nataša Radić, tells RTS that the traditional investment of foreign exchange reserves in gold is a form of safe investment, which is especially evident in times of crisis.
“In the previous period, interest rates on the international market were extremely low, they were even zero and negative, as is the case with the euro, so central banks definitely invested a certain part of their foreign exchange reserves in gold and thus avoided losses based on negative interest rates,” Radićeva explained.
When it comes to the increase in the cost of borrowing, he points out that not everything should be viewed through cash loans, because it is the type of loans that by their nature are the most risky and most prone to that increase.
– Of course, interest rates have increased, which is a consequence of increased inflation both internationally and here in the last year and a half, so that central banks had to react by increasing their reference interest rates, which was certainly transmitted to other interest rates as well on the financial market and led to an increase in prices, Radićeva explains.
Asked how long she expects interest rates for dinars and euros to grow, Radićeva says that the National Bank of Serbia expects inflation to reach its peak already during the first quarter of this year. Then, he adds, inflation would begin to decrease and should return to the target range by the middle of next year.
