Serbia's Govt Expects C-bank To Cut Key Rate - Econ Minister Dinkic

The central bank, NBS, and the government have to work together in the interest of stabilising prices and the exchange rate of the dinar, Dinkic told a business forum.

NBS said earlier this month it will keep the repo rate unchanged at 17.75% and doubled the share of mandatory reserves on foreign currency deposits that commercial banks have to maintain in Serbian dinars in order to slow the dinar's fall. It last changed the repo rate in October, raising it to 17.75% from 15.75%.

The head of economic analysis and strategy department in NBS Branko Hinic said last month that, based on current projections, and taking into consideration all risks, the NBS monetary board estimates that the repo rate is more likely to remain the same or to be raised in the foreseeable future than it is to go down. He added the NBS  will probably relax its monetary policy in 2009.