BELGRADE (Serbia), December 10 (SeeNews) – JP Morgan considers the Serbian dinar to be a properly valued currency, the country's central bank said quoting data from the 2020 emerging markets report of the US financial holding.
Of the 25 analysed emerging markets currencies from around the world, the Serbian dinar and the Philippine peso stand out as realistically valued, the Serbian central bank (NBS) said in a statement on Monday.
The factors that contributed to such assessment are the growth of productivity and the share of investments in the formation of gross domestic product (GDP), a very high inflow of foreign direct investments, as well a reduced external vulnerability of the country, backed by a decrease in the share of external debt-to-GDP ratio to 63.3% in the middle of 2019 from 73.5% in 2015, the central bank said.
The report is a confirmation that the central bank has the right monetary policy and that the comments of economists that the NBS artificially keeps the exchange rate at a certain level are unfounded, it added.
According to the report, in 2007 and 2008 the dinar was overvalued by more than 10%, while in 2011 and early 2012 it was undervalued by close to 10%. Since the second half of 2012, these deviations never exceeded 5%, and on average over the last seven years, the dinar has been fully properly valued, NBS said.
Serbia's central bank is implementing a managed float exchange rate regime based on supply and demand to preserve price and financial stability and to maintain an adequate level of foreign exchange reserves.