“We (Serbia) don’t need money”; both the State President and the Minister of Finance have said this many times in the last few months, commenting on favourable loan offers from the IMF and the European Commission to help the economy recover from the consequences of the coronavirus pandemic, reports Nova.rs.
According to data from the IMF website, the organization offered a loan with an interest rate ranging from 1.29 to 2.1% (depending on the amount of money loaned) to countries whose economy is in danger because of the coronavirus, but Serbia did not want to take the money.
Nova.rs said that the offer was even lower with Bosnia-Herzegovina getting 333 million euro at an interest rate of 1.05 per cent and a 39-month-grace period.
The IMF offer comes with the condition that the IMF would have to supervise how the money is spent which the bond issue does not include.
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Nova.rs reported said that Serbia issued bonds worth a billion euro at an interest rate of 1.62 per cent and a due date of 10 years in June 2019 and launched a re-issue of Eurobonds in November that year worth 550 million euro at an interest rate of 1.25 per cent.
The National Bank of Serbia (NBS) Governor, Jorgovanka Tabakovic said that the bond issue is more proof that international investors have full confidence in the Serbian economy. She also claimed that the interest rate on the bonds was lowered by half a percentage point because of high demand at the auction.
The Serbian Fiscal Council said on April 6 that the country would need 6.5 billion euro to deal with the fallout of the pandemic this year alone. Less than a week later, President Aleksandar Vucic said that Serbia would not take the IMF’s offer since the country has huge hard currency reserves and 31 tonnes of gold. Three weeks later, the President said that Serbia refused 1.2 billion euro from the IMF, saying that it should not get further into debt than it needs to.
Nova.rs also reported that an unidentified group of Serbian citizens, who learned beforehand of the latest bond issue, sent letters to four investment banks warning them of the situation in Serbia and the risks. President Vucic commented on that letter on Monday saying that, despite the letter warning of the political and economic crisis in Serbia, investors were not tricked.
This post is also available in: Italiano