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The Governor of the National Bank of Serbia, Jorgovanka Tabaković, assessed that the allegations that Serbia borrowed more by issuing Eurobonds than would be the case with loans from international financial institutions are inaccurate and based on incomplete data and not professionally interpreted.
As announced from the Governor’s office, Tabaković stated that International Monetary Fund (IMF) funds offered through the Rapid Financing Instrument (RFI) mean that the country that uses them has trouble financing the balance of payments, and that Serbia is not one of those countries. .
“The withdrawal of these funds is not as favorable, except for relatively smaller amounts and in a shorter period than what Serbia managed to obtain by issuing Eurobonds. Taking these funds would mean that Serbia would in fact enter into a new stand- and three years with this financial institution. ” “It would be the same as that agreement, although Serbia does not need that type of financial agreement in which it withdraws funds,” Tabakovic said.
Tabakovic said that “it would certainly send a negative signal and could lead to an increase in the country’s risk premium in the future, that is, the costs of loans, because potential investors may misunderstand that Serbia has certain macroeconomic problems in the long run. term, which is not true. “
“IMF loans have more favorable conditions for relatively smaller amounts and in the short term, because in this way the international financial institution discourages long-term loans from countries in larger amounts. Therefore, it is not possible to simply compare the conditions under which individual countries borrowed from the IMF. ” with the conditions under which the Republic of Serbia issued a euro bond, “said Tabaković.
According to her, if the two billion euros provided by Serbia in the international market, for seven years at a coupon rate of 3,125 percent (rate of return of 3,375 percent) are compared to RFI conditions, “the rates in this agreement they would be between three and four percent, with all the other requirements and additional restrictions that an agreement with the IMF would entail. “
“In the short term, up to 5 years. In addition, the funds raised by Eurobond can be used to pay the debt of the previous period and finance assistance to the national economy, while the main objective of the IMF funds is to finance imbalances of the balance of payments, that is, overcoming liquidity problems. “Serbia does not exist,” said the NBS governor.
Tabakovic stated that “it should be borne in mind that there is no basis for comparing the conditions under which Eurobonds were issued during the previous year with the conditions during the world economic crisis that caused an increase in interest rates for all countries requesting loans. “
“The global risk premium has increased significantly, and even under such conditions, Serbia managed to reduce the cost of borrowing by 50 basis points during the auction, while demand from international investors was extremely high. Serbia will certainly think when meet the conditions in the international market. ” to replace the funds raised through Eurobonds on even more favorable terms, as it did last year, “Tabaković announced.
Tabakovic emphasized that “it is especially important that this rate be much lower than the rates that Serbia borrowed before 2012,” in dollars when, according to her, “irresponsible policy makers accepted additional currency risk.” it costs a lot
It also cost us that the Serbian National Bank and the Serbian Government have been paying inherited liabilities under previous agreements with the IMF since 2012 (the total costs paid from these agreements exceeded 90 million euros), whereas since 2012 we have been with the IMF. “They made advisory arrangements without using financial means,” said Tabaković.
According to her, with all that in mind, Serbia, when issuing a seven-year euro bond for the amount of two billion euros, “received another confirmation that the most prominent international investors, in the context of the global economic crisis caused by the coronavirus pandemic, they have full confidence in the future of the Serbian economy. ” responsible economic policies. “
“Collecting these funds in another way, including taking out a loan from the International Monetary Fund, would have a much higher price,” Governor Jorgovanka Tabaković emphasized.
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