SARAJEVO (Bosnia and Herzegovina), June 29 (SeeNews) – The UK's departure from the European Union has not had any immediate effects on Bosnia's banking sector, conversely it has instigated a depreciation of the euro against the dollar which may lend a boost to the competitiveness of Bosnia's economy on the world markets, the country's central bank said on Wednesday.
The Bosnian marka is pegged to the euro under a currency board system.
From a macroeconomic point of view, Bosnia could suffer some negative effects from Brexit if the current turbulence leads to a slowdown of economic growth in the euro area, the central bank said in a statement.
It also noted that, except in an extreme scenario, it does not expect Brexit to have significant external pressure on inflation in the country, considering the still strong influence of low food and energy prices and the low inflation in the euro area.
In 2015, Bosnia and Herzegovina posted an average annual deflation of 1%, following a deflation of 0.9% in 2014. The IMF has projected that the country will post an average annual inflation of 1.1% this year.
However, the bank warned that the current political uncertainty in Europe and instabilities in financial markets do not contribute to fostering an environment for accelerated economic growth in the country.
Bosnia and Herzegovina is comprised of two autonomous entities - the Muslim-Croat Federation and the Serb Republic.