Wednesday, January 19, 2011

Serbia Central Bank Tightens Reserve Requirements

The Central Bank of Serbia raised the short-term bank foreign currency reserve requirement to 30% from 25% and maintained the long-term forex reserve rate at 25%. On domestic Dinar denominated assets the Bank has set the mandatory reserves for dinar assets of up to two years at 5% and dropped the reserve requirement for dinar assets with maturities longer than two years. The moves are designed to stem inflationary pressures, and bring inflation (10.3% in December) back into the target range; the Bank also noted that it would ease policy once inflation tracks back to within the target range of 4.5%, +/-1.5%.


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