Meeting Kozaric - Reinermann

The Central Bank of Bosnia and Herzegovina (CBBH) will support projects which the World Bank (WB) Office in BH is trying to implement in the public and private sector domain - this was stated during the meeting of the CBBH Governor Kemal Kozarić and Director of the of the WB Office in BH Dirk Reinermann, which has been held today, February 1 2005 in the CBBH premises in Sarajevo.

Reinermann congratulated Kozarić on his appointment as the CBBH Governor and stressed that the positive fact is that the management of the CBBH has been transferred into the hands of the local officials, which is clear sign of maturity and credibility of the CBBH.

Reinermann stressed that the WB wants to give its contribution to savings in the public sector domain in order to make possible solving of the current account deficit in relation to the GDP, which would cause the improvement of the credit capability of BH by the end of 2007. This is one of the basic features of the WB Assistance Strategy for the next three years, which, according to Reinermann, was approved by the WB Board.

Director of the WB Office in BH estimated that the CBBH, which wants to see the current account deficit decreased, could also be interested in this issue.

As far as the reform in the private sector is concerned, the WB supports speeding up of the companies' privatization process, related to that, the significance of the corporate restructuring was stressed, which, according to the common evaluation of Kozarić and Reinermann, is considered the most important, but also as the most difficult issue.

Besides CBBH operations, Reinermann was also interested in the position of the CBBH on loans growth in BH and on the Balance of Payments Statistics.

The CBBH thinks that the loans growth rate from 20% to 25%, which is the estimate for this year, is not concerning and the ratio between loans extended to citizens and to the economy has been lately going in favor of the economy. With the only mechanism at its disposal, the required reserve, the CBBH is trying to direct credit activities of banks towards the economy.

As far as the Balance of Payments Statistics is concerned, Governor Kozarić pointed out the difficulties in the data collection with regard to implementation of different methods in the entities. All this is creating the wrong image of BH in the local and international public. In order to present the realistic image of BH economy, it is necessary to improve the statistics, Reinermann and Kozarić concluded during the today's meeting, which was also attended by their associates.

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Zijada Kovač