National Assembly of the Republic of Serbia / Activities / Activity details
Tuesday, 22 September 2015
63rd Sitting of the Committee on Finance, State Budget and Control of Public Spending
At the sitting held on 22 September, the members of the Committee on Finance, State Budget and Control of Public Spending reviewed a number of reports, programmes and plans of the National Bank of Serbia for 2014 and 2015.
The Committee reviewed the National Bank of Serbia Semi-Annual Report on Monetary Policy (January – June 2014), National Bank of Serbia Governor’s Council Activity Report for the period 1 January – 30 June 2014, National Bank of Serbia 2015 Monetary Policy Programme, National Bank of Serbia 2015 Financial Plan of the Governor’s Council of the National Bank of Serbia, National Bank of Serbia Governor’s Council Activity Report for the period 1 July – 31 December 2014, National Bank of Serbia 2014 Financial Report accompanied by authorised auditor’s report, National Bank of Serbia 2014 Annual Monetary Policy Report, National Bank of Serbia 2014 Annual Report on Transactions and Business Results, National Bank of Serbia 2014 Financial System Stability Annual Report, Decision amending the Decision on the adoption of the National Bank of Serbia 2015 Financial Plan of the Governor’s Council of the National Bank of Serbia and the National Bank of Serbia Semi-Annual Report on Monetary Policy (January – June 2015).
Governor of the National Bank of Serbia Jorgovanka Tabakovic presented the NBS reports, programmes and plans, with a special focus on the NBS 2014 Annual Monetary Policy Report, NBS 2014 Annual Report on Transactions and Business Results and the NBS 2014 Financial Report accompanied by authorised auditor’s report. The Monetary Policy Report states that the low inflation pressure in 2014 led to the NBS reducing the benchmark interest rate threefold so that at the end of the year it was only 8%, which was then followed by the decrease of interest rates in banks, said Tabakovic. The banks’ required foreign currency reserves were also reduced in order to stimulate their loan activity. Target inflation shifted from 3.7% in January to 1.7% in December 2014, a move helped by the low rise in regulated prices, decrease of agricultural produce prices and a drastic slump in the price of oil. The drop in GDP to 1.8% at the end of the year was the result of the drop in private spending and investment, concluded Tabakovic. Domestic product deficit was 6% of GDP, foreign reserves were at an adequate level of 9.9 billion EUR which was enough for six months of goods and service import. In 2014 the RS dinar fell 5.3% to the euro, and the fiscal deficit was 6.7% GDP, large portion of which went to interest rates i.e. 3% of GDP. The Governor said that fiscal trends in the second half of 2014 were better thanks to the reforms. In 2014 NBS, despite the changes on the international market, managed to ensure a low and stable inflation and maintain a stable exchange rate for the RS dinar. In the last two years the inflation was 2% and deflation was avoided, benchmark interest rate remains at 8%, and fiscal consolidation measures opened up room to relax the monetary policy, said Tabakovic. NBS intervened on the market by buying 260 million and selling 1.8 billion EUR, the financial sector is stable and very liquid, and the banking sector has positive results. In 2014 NBS profited by 80.8 billion RSD, after taxes, the biggest profit coming from exchange rate differences. However the result of operative transactions is calculated by excluding positive exchange rate differences, so the NBS recorded losses of 2.45 billion RSD in 2014, which is better than in 2013 when the loss was over 17 billion RSD, concluded Tabakovic.
In the joint discussion on all the items on the agenda the Committee members asked whether the NBS is thinking about instituting a fixed exchange rate for the dinar, deliberating on how to solve the citizens’ problems resulting from their CHF-indexed housing loans, and also spoke about the lagging level of investments, solution to unreclaimable loans and the functioning of foreign e-trade in line with the new legislation.
Following the debate the Committee members accepted all 11 of the reports, programmes and plans of the National Bank of Serbia for 2014 and 2015.
The sitting was chaired by Committee Chairman Veroljub Arsic.
Governor of the National Bank of Serbia Jorgovanka Tabakovic presented the NBS reports, programmes and plans, with a special focus on the NBS 2014 Annual Monetary Policy Report, NBS 2014 Annual Report on Transactions and Business Results and the NBS 2014 Financial Report accompanied by authorised auditor’s report. The Monetary Policy Report states that the low inflation pressure in 2014 led to the NBS reducing the benchmark interest rate threefold so that at the end of the year it was only 8%, which was then followed by the decrease of interest rates in banks, said Tabakovic. The banks’ required foreign currency reserves were also reduced in order to stimulate their loan activity. Target inflation shifted from 3.7% in January to 1.7% in December 2014, a move helped by the low rise in regulated prices, decrease of agricultural produce prices and a drastic slump in the price of oil. The drop in GDP to 1.8% at the end of the year was the result of the drop in private spending and investment, concluded Tabakovic. Domestic product deficit was 6% of GDP, foreign reserves were at an adequate level of 9.9 billion EUR which was enough for six months of goods and service import. In 2014 the RS dinar fell 5.3% to the euro, and the fiscal deficit was 6.7% GDP, large portion of which went to interest rates i.e. 3% of GDP. The Governor said that fiscal trends in the second half of 2014 were better thanks to the reforms. In 2014 NBS, despite the changes on the international market, managed to ensure a low and stable inflation and maintain a stable exchange rate for the RS dinar. In the last two years the inflation was 2% and deflation was avoided, benchmark interest rate remains at 8%, and fiscal consolidation measures opened up room to relax the monetary policy, said Tabakovic. NBS intervened on the market by buying 260 million and selling 1.8 billion EUR, the financial sector is stable and very liquid, and the banking sector has positive results. In 2014 NBS profited by 80.8 billion RSD, after taxes, the biggest profit coming from exchange rate differences. However the result of operative transactions is calculated by excluding positive exchange rate differences, so the NBS recorded losses of 2.45 billion RSD in 2014, which is better than in 2013 when the loss was over 17 billion RSD, concluded Tabakovic.
In the joint discussion on all the items on the agenda the Committee members asked whether the NBS is thinking about instituting a fixed exchange rate for the dinar, deliberating on how to solve the citizens’ problems resulting from their CHF-indexed housing loans, and also spoke about the lagging level of investments, solution to unreclaimable loans and the functioning of foreign e-trade in line with the new legislation.
Following the debate the Committee members accepted all 11 of the reports, programmes and plans of the National Bank of Serbia for 2014 and 2015.
The sitting was chaired by Committee Chairman Veroljub Arsic.