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Serbia's inflation in check, IMF deal still needed

BELGRADE, Aug 23 (Hina) - Inflation in Serbia is declining and is likely to return to the targeted frameworks in October, Serbian National Bank governor Jorgovanka Tabakovic said in Friday's Vecernje Novosti daily.

She said the state's foreign exchange reserves totalled EUR 10.7 billion but nonetheless suggested a new arrangement with the International Monetary Fund which should additionally contribute to economic stability.

"Given the economy's vulnerability and the need for structural change, the foreign exchange trends are extremely important because they should contribute to economic stability. And that's why an arrangement with the IMF is important," Tabakovic said.

"The foreign exchange market is stable, but (the IMF's) technical and advisory assistance is important to us in the implementation of the structural reforms which are a prerequisite and a guarantee for a stable currency, low inflation and sustainable economic growth," she said.

"Inflation is going down and by October it will be returned to the targeted frameworks of four percent, plus or minus 1.5 percentage points."

Tabakovic said the participants in Serbia's financial market had recognised the government's will to improve the economic situation and create a stable environment for doing business and foreign investments.

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