Šoškić: “A strong dinar exchange rate creates completely unfounded illusions about economic progress”

“With a strong dinar exchange rate, the government has completely unfounded illusions about progress, high wages and gross domestic product, while inflation is also affected by linear financial aid given to citizens. The poorest citizens are affected the most because food has become more expensive and most of the family budget is spent on food,” said Faculty of Economics professor Dejan Šoškić.

Šoškić, who is also a former governor of the National Bank of Serbia (NBS), also warned that today’s level of inflation, in addition to rising food and energy prices, is the result of unjustified monetary policy, when the NBS “made an undue and meaningless purchase of corporate bonds from primary issuance.”

“This move opened a channel for the movement of money from primary issue directly to corporations with seriousin potential for abuse. And it is reminiscent of the monetary expansion mechanisms of the early 1990s,” Šoškić said.

Asked about the need for faster reform of public companies, Šoškić said they continue to serve as party loot where taxpayers’ money in various ways, and mainly illegally, flows into the private ownership of interest groups along with political parties. “Solving these problems requires changes in the functioning of political parties and in the political life of our country,” Šoškić concluded.

(Nova, 20.01.2020)

https://nova.rs/vesti/biznis/soskic-jakim-kursom-dinara-stvaraju-se-potpuno-neutemeljene-iluzije-o-napretku/

This post is also available in: Italiano

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