“Serbia is currently discussing a stand-by deal with the IMF,” Jelasic told a news conference.
Last week, Economy Minister Mladjan Dinkic said that Serbia does not need a new funding arrangement from the IMF. The country completed a three-year stand-by deal with the IMF in February 2006.
Jelasic also said the reason why the central bank raised its key repo rate to 17.75% from 15.75% last week were the high inflation in the country, the budget rebalancing and the turbulence on international financial markets.
Core inflation, which was 10.6% year-on-year in October, has exceeded the central bank’s end-year inflation target of below 10%, Jelasic said. He added that retail prices, which rose to 10.5% year-on-year in October, are not expected to fall.
The central bank intervened "abnormally often" to support the weakening dinar currency last month, selling 260 million euro ($332 million) on the local interbank market. The bank’s October interventions were equivalent to 6.4% of the month’s trading, which totalled 4.2 billion euro, Jelasic said.
He also said that Serbia is not in danger of experiencing the real estate crisis currently felt in the U.S. as the mortgage loans extended by the country's banks, or 1.6 billion dinars (19 million euro/$24 million), are equivalent to just 6% of the total balance amount held by the banks.
The central bank announced several measures last month to reduce the burden borne by the banks amid the global financial crisis and improve the stability of the interbank foreign exchange market.
It scrapped its mandatory reserves requirement for banks' fresh borrowing in foreign currency, retroactive from October 1, aiming to boost the liquidity of the country's banking system. It also increased to 20% from 10% the share of mandatory reserves on foreign currency deposits, which banks have to maintain in Serbian dinars.
Also last month, Serbia said it planned to raise the guarantee for depositors in local banks to 50,000 euro ($68,600) from the current 3,000 euro and to scrap the capital gains tax in a bid to boost the country's economy affected by the crisis.
(1 euro = 84.3183 Serbian dinars)