Governor Kozaric attending the 28th meeting of the Central Bank Governors’ Club of the Central Asia, Black Sea Region and Balkan Countries

Governor of the Central Bank of Bosnia and Herzegovina Kemal Kozarić, Ph.D., participates in the 28th meeting of the Central Bank Governors' Club of the Central Asia, Black Sea Region and Balkan Countries taking place in Warsaw, capital of the Republic of Poland.

The main subject of this Governors' meeting, featuring also the  representatives of  countries such as Russia, China and Israel, was the adequacy of the national currencies rates regimes  in the era of global economic crisis and their influence on the economic growth. Discussion about the selection for the appropriate way of managing the exchange rate showed that the so far fix rate regime being the Currency Board Arrangement in Bosnia and Herzegovina has been the most optimal exchange rate for the state of a size and economic influence such as Bosnia and Herzegovina has, and that quite number of states is looking for exit in  the  same or very similar model.

"The Most optimal model for small and open economies is the selection of fix rate, if possible pegged to the currency of main trade partners, which is the case in our country. This choice effected in concrete results, such as maintaining of the monetary stability and the  confidence in convertible mark, which indirectly contributed to the preservation of the banking sector stability, being the blood stream of BH economy", said Kozarić during the discussion.

The discussion also proved that the selection of the alternative in the form of "floating rate" showed to be adequate only in case of great industrial powers and exporters, while in the  small economies, its implementation has resulted, by rule, in high inflation and long term negative consequences for the economy.

The Central Bank Governors' Club of the Central Asia, Black Sea Region and Balkan Countries gathers twice a year the Governors and high officials from the monetary policy and finances community aiming to have the exchange of opinions on the actual subjects and further strengthening of the mutual cooperation.

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