The experiences of the governor and the minister of finance before entering politics are not a guarantee that we will overcome inflation with the instruments of monetary and economic policy, which depend on their moves,” Kovačević said in a statement.
He believes that the authorities in Serbia should not have allowed the import of inflation, nor should they now, in order to prevent it, use only one mechanism to suppress it, such as an increase in the reference interest rate.
“There is a bigger economic plague than inflation, and that is recession as a consequence of poor treatment of inflation. It takes a whole mechanism of measures and a high talent in looking at a sick economic society to prevent these diseases,” said Kovačević.
He proposed the urgent introduction of a weekly review and adjustment of the reference interest rate as a basis for the credit potential of commercial banks to the economy in Serbia.
“Previous long-term loans of up to ten years should be classified as medium-term loans, and mandatory reserves for placements in the short, medium and long term should be set in stages. Commercial banks should also be rewarded by reducing the mandatory reserves for credit arrangements from the banks’ own capital for placements in the economy to 15 and 20 years”, assessed Kovačević.
His proposal is to single out the most important branches of industry that have a decisive influence on the lives of Serbian citizens due to the country’s certain entry into recession and to help them with the policy of subsidies.