Presentation of the Foreign Exchange Market in Serbia Cover Image

Prikaz deviznog tržišta u Srbiji
Presentation of the Foreign Exchange Market in Serbia

Author(s): Vesna Martin
Subject(s): Economy
Published by: Udruženje banaka Srbije p.u.
Keywords: foreign exchange market; exchange rate; foreign exchange interventions; foreign exchange; foreign cash; spot transactions; swap transactions

Summary/Abstract: In December 2008, the Monetary Policy Committee of the National Bank of Serbia adopted the Memorandum on Inflation Targeting as Monetary Strategy, which defines the formal implementation of the inflation targeting regime as of 1 January 2009. In accordance with that monetary strategy the National Bank of Serbia introduced the managed floating exchange rate. This exchange rate regime means that the exchange rate is formed freely, under the influence of supply and demand on the interbank foreign exchange market, and that the National Bank of Serbia applies foreign exchange interventions in order to prevent excessive short-term daily fluctuations in the exchange rate of the dinar against the euro. In doing so, the central bank strives to achieve and preserve the financial and price stability and relative stability of the dinar exchange rate. The movements in the value of the exchange rate of the dinar against the euro are affected by the factors of domestic origin, such as the activities of domestic and foreign enterprises and banks, but also external factors, such as the impact of the measures introduced by major global central banks, geopolitical tensions and changes in the price of oil and other products. The aim of the paper is to present the functioning of the foreign exchange market in Serbia, the types of transactions, the reporting system, formation and announcement of the official middle exchange rate of the dinar against the euro, types of foreign exchange interventions and foreign exchange risk protection instruments.

  • Issue Year: 47/2018
  • Issue No: 3
  • Page Range: 54-73
  • Page Count: 20
  • Language: English, Serbian
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