strategic, gallup, ipsos / ninamedia, bloomberg and nbs. * ninamedia agency since december 2014, and ipsos and gallup in the prior period. the survey was not conducted in november 2014. in conditions of relatively high euroisation of the financial system which has grown strong roots in serbia and is inherited from the hyperinflation period, we all feel very strongly about the relative stability of the exchange rate. it is important to us because relative stability of the exchange rate means lower pressure on the prices of imported products and in turn on inflation at home. moreover, it has shown to be the cornerstone of the overall financial stability and business predictability. i believe that over the past four years we have demonstrated not only the desire but also the capacity to achieve and maintain relative stability of the exchange rate, even in difficult times, when many other countries failed to do so. i use the word “ capacity ” because the value of the dinar was preserved owing to greater effectiveness of the national bank of serbia ’ s interventions in the foreign exchange market, whereas overall stability was attained through full coordination of monetary and fiscal policy bis central bankers ’ speeches measures. you can judge for yourselves whether it truly is so based on the fact that over the past four years the dinar depreciated by less than 3. 5 %. chart 3 key policy rate and the average rate on dinar chart 4 movements in eur / rsd exchange rate and nbs fx ( in % ) ( eur / rsd ) interventions corporate and household loans * 9. 1 - 1 - 2 weighted average rate on dinar corporate and household loans key policy rate, period - average ( eur bln ) 4. 0 - 3 - 4 - 5 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 5 7 10 1 5 8 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 nbs interventions, cumulative net ( breakpoint : beginning of 2013 ) ( rhs ) eur / rsd ( lhs ) source : nbs. * excluding revolving loans, current account overdrafts and credit card debt. source : nbs. having reduced the key policy rate from 11. 75 %, where it was in may 2013, to the current 4. 0 %, which is its lowest since the introduction of the inflation targeting regime, the national bank of serbia, beyond any

doubt, has provided critical support to the country ’ s economic recovery. as a result, interest rates on dinar loans to corporates and households dropped by more than 10 percentage points. we find it encouraging that the number of your questions about dinarisation is increasing because this means that you too recognise that dinarisation is gradually and unquestionably growing in the household sector. dinar savings have risen almost threefold since end - 2012, which we interpret as growth of confidence in the domestic currency, as well as in the activities of the nbs. when compared to savings in foreign currencies, savings in dinars do not measure up, but they are constantly increasing. in the first half of the year, 75 % of new loans to households were denominated in dinars. we are pleased to see that the results achieved by the national bank of serbia – such as low inflation, relative stability of the exchange rate and halved interest rates in the dinar market – are encouraging both household saving and borrowing in dinars. aware of how deep the roots of euroisation are, it was clear to us that the process of dinarisation would be a long one, and yet we decided to go ahead with it. it is equally important that the household sector is not the only one to record an upturn in lending – overall lending activity has been on the mend since the second half of 2015, and in june domestic lending to corporates and households recorded growth of 3. 5 % year - on - year. chart 5 interest rates on dinar corporate and household chart 6 dinarisation of household loans and a rise in ( weighted average values, p. a., in % ) ( rsd bln ) loans * dinar savings ( in % ) 10. 5 6. 6 new dinar household loans new dinar corporate loans 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 source : nbs. * excluding revolving loans, current account overdrafts and credit card debt. share of dinar in bank receivables from household sector ( rhs ) dinar savings ( lhs ) 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 source : nbs. bis central bankers ’ speeches i have been serving as governor during a period marked by anything but certain