Exchange rate: Who benefits from the stronger dinar?

While those who took out loans hope that the dinar / euro exchange rate will not jump to 120 dinars, which would make their loans more expensive to repay, the exporting companies are protesting at such strong dinar.

They would rather see the Serbian dinar depreciating against euro. In translation, weaker the dinar, more of them they get for euros. Of course, higher export means bigger economic growth, and growth of employment.

The Serbian PM, Ana Brnabic is due to meet with the officials from the National Bank of Serbia (NBS) to discuss the current monetary policy and the dinar’s appreciation. The PM says that it was certain business people, whose businesses are affected by the strong dinar, who urged her to meet with the NBS because their market is being badly affected by cheap imports.

Economy expert, Ljubomir Madzar reminds that only importers are profiting from the strong dinar. “The strong dinar implies the weaker euro which means that company can now buy goods on the global market for less money. In simple terms – strong dinar means you get less dinars for 1 euro – which is something that importers don’t like”, Madzar adds.

Although the dinar did appreciate, the price of imported goods did not go down, the Novosti daily says.

Since the beginning of this year, dinar appreciated by 3.5% in relation to euro. This appreciation started in April. Currently, the median dinar / euro exchange rate is 119.17 dinars for 1 euro which is the lowest value of euro and the highest of dinar since November 2014.

Since the beginning of this year, the NBS bought 890 million EUR and sold 345 million EUR on the domicile foreign currency market with the aim of softening the extreme, short-term fluctuations of the dinar / euro exchange rate. 

(021.rs, 03.09.2017)

http://www.021.rs/story/Info/Srbija/170787/Kome-odgovara-sto-je-dinar-sve-jaci.html

 

 

This post is also available in: Italiano

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