The IMF Delegation Met With the CBBH Governor

The Governor of the Central Bank of Bosnia and Herzegovina Kemal Kozarić with Vice Governors, met today, on 18 June 2008 in Sarajevo, with Delegation of the International Monetary Fund (MMF) led by Head of the Mission for BH Costas Christou.

During the discussion about microeconomic situation in BH, the concern was stressed because of the inflation increase in BH and because of the current account deficit increase, while the still high unemployment rate and stagnation of structural reforms were stressed as well.

The CBBH Governor stressed that the solution in fight against inflation is in real and fiscal sector, and that the CBBH remains firm in its decision not to perform any form of easing of inflationary pressure with monetary instruments. Also, the issue of trade deficit needs to be solved to substitution, that is, trough reduction of import of products, which BH already produces, through increase of its production and stimulation of exports. 

The IMF Delegation was also informed about slowdown in BH credit growth, which was, partially, stimulated by the CBBH Decision to increase reserve requirements to commercial banks from 15% to 18%.

The joint opinion was that the role of the Fiscal Council of BH is very important for the fiscal policy of BH, which must have effect on stronger connection with the monetary policy.

The IMF representatives expressed their content with cooperation with the CBBH, as well as, the  wish to have it equally successful in the future.

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