Chairman and two members of NBS Governor's Council resign from their posts

Chairman of the NBS Council of the Governor Bosko Zivkovic and two members of the Council, Zorica Mladenovic and Milojko Arsic, informed Speaker of the Serbian Parliament Nebojsa Stefanovic of irrevocable resignations from their posts, providing the following explanation:

“Following the enactment of amendments to the Law on the National Bank of Serbia by the National Assembly on 4 August this year, the National Bank of Serbia became personally and functionally dependent on the parliamentary majority and the Government of the Republic of Serbia. The adopted amendments to the NBS Law grossly violate internationally accepted principles of central bank autonomy and independence from the Government and individual interest groups."

In their opinion, the adoption of this Law will, in the short run, undermine the position of the Republic of Serbia in the international financial market, by lowering its credit rating and increasing the costs of borrowing for the government, corporates and citizens.

"The adoption of this Law will probably bear down on cooperation with the IMF and slow down Serbia’s European integrations. This is likely to result in lower inflow, if not even outflow, of capital from Serbia, which in circumstances of a high current account deficit may trigger, over a relatively short period, a balance of payments crisis and exchange rate collapse. Amendments to the Law on the NBS create systemic room for monetary policy misuse by the Government which could lead to spending of foreign exchange reserves and a substantial increase in inflation," reads the explanation on the official website of the NBS.

Amendments to the Law on the NBS considerably altered the function of the Council of the Governor, by transferring the Council’s oversight function formally to the National Assembly, but in effect to the Government of the Republic of Serbia.

"Such legal solutions make the Council redundant. The solutions introduced by amendments to the Law on the NBS are in direct contravention to our views and knowledge about central bank operations," it is concluded.