BELGRADE, July 30 (Xinhua) -- Serbia's financial system is more stable and resilient to potentially adverse effects from the international environment, Governor of the National Bank of Serbia (NBS) Jorgovanka Tabakovic said on Monday while presenting the annual Financial Stability Report here.
According to an NBS statement, Tabakovic said that the report shows that the financial system in 2017 was more resilient to potential future shocks than in 2016 owing to "improved structural characteristics and favorable growth prospects, coupled with the enactment of well-timed measures and regulations and full coordination between monetary and fiscal policies."
"This was confirmed in 2017 by credit rating upgrades by all three rating agencies, successful completion of the three-year stand-by arrangement with the International Monetary Fund (IMF) and a decline in the country risk premium to its historic low," Tabakovic explained.
She continued that by easing its monetary policy, NBS encouraged the increase in investment and private consumption and supported sustainable economic growth and thus achieved its key objectives -- to ensure monetary and financial stability.
"Owing to better export performance, high foreign direct investment inflows and greater interest of foreign investors in long-term government securities, the Serbian dinar strengthened in relation to euro by 4.2 percent in 2017," Tabakovic said.
"Against the backdrop of GDP recovery, low and stable inflation, a relatively stable exchange rate and vigorous fiscal consolidation, positive tendencies were recorded both in the corporate and household sectors. A fall in the unemployment rate and rising wages were accompanied with growth in household loans and rising savings," she further pointed out.
Tabakovic said that the banking sector remained adequately capitalized, highly liquid and profitable in 2017 and that "the quarterly macroprudential stress tests show that the domestic banking sector, as a whole, would remain resilient to shocks even if the worst case scenario materialized."
"Behind us is a very successful year, as we can see in the results achieved, as well as in attained and improved macroeconomic stability. National Bank of Serbia will remain committed to achieving its objectives, contributing to the resilience and stability of the domestic financial system," Tabakovic concluded.
