able to respond with a huge package of measures owing to the monetary and fiscal space we created in the past period. had we postponed the adoption of measures, the consequences of such irresponsible behaviour would have been enormous. we would have witnessed unemployment, factory closures, billions of euros of gdp lost. had we not responded immediately and comprehensively, we estimate that gdp would have fallen by over 6 % in 2020, while the recovery, as was the case after the earlier, 2009 crisis, could last three to five years. owing to everything we have done, including the latest government measures, serbia will recover from the consequences of the pandemic in the course of this year. dear friends, we would not be able to talk today about sustainable development and innovation had we not protected our economy from the consequences of the pandemic with our measures. almost each month the national bank of serbia responded with some of its measures. to support economic recovery, in 2020 we cut the key policy rate four times, to the current level of 1. 0 %. we ensured even more favourable financing conditions, with interest rates on new dinar corporate loans reduced by additional 0. 8 pp in 2020 ( to 3. 2 % in december ). 1 / 3 bis central bankers'speeches as a result of all the measures we have adopted, total domestic lending continued at an almost two - digit growth rate for the third year in a row, with sound y - o - y growth of 9. 9 % recorded in december. owing to all the measures, and despite the pandemic, the npl ratio was lowered further, from 4. 1 % to 3. 7 %. thanks to the combination of all the adopted measures, last year interest rates on dinar and euro - indexed corporate loans almost equalised, led by a reduction in dinar interest rates. we had never had such situation in serbia before. moreover, in january this year the interest rate on dinar corporate loans of 2. 2 % was at a significantly lower level than the interest rate on euro loans which measured 2. 8 %. you have also seen that inflation in serbia is no longer talked about. in 2020 as well, we maintained average inflation at 1. 6 %, i. e. we continued to fulfil our primary objective even in the crisis year. we have also preserved the relative stability of the exchange rate, this being one of the key contributions to overall macroeconomic stability of the country and business

sources of financing. the existence of a means of guarantee bis central bankers ’ speeches would put the enterprises into a better negotiating position, when considering credit contract conditions, as they can offer concrete collateral. in circumstances where there are no means or possibilities of land registration, or a way for creditors to register their mortgage rights, credit becomes a very risky transaction in which the lender claims much higher interest rates if he decides to lend at all. developed land registry systems should provide for “ cheaper ” credit for enterprises and consumers. real estate registration also has consequences with regards to financial reporting. if one enterprise has registered real estate property, its balance sheet will improve and so will their chances to provide adequate financing. from a historical perspective, it was not by chance that successful empires throughout history often had well - developed land registry systems. a sophisticated land registry system improves legal security of property rights and thus improves the basis for finance and market economy. if we consider the relevant publications that take into account assessments of the south - east european region, we can see that one of the most exploited subjects lately has been the region ’ s exposure to foreign currency lending. as interest rate differentials across currencies during the last decade have been considerable, and the region is mostly export - oriented towards the euro zone, it may appear that efforts of market participants ’ education on such issues as risks linked to currency mismatch and existence of hedging instruments are long overdue. this is especially important for the corporate and small business sectors that have the ability to access a wide range of instruments ( such as futures, forwards, options and swap contracts ) that may serve as protective tools, especially during these turbulent times with rapid changes in international markets. furthermore, our corporate sector needs to know that fx hedging instruments serve to insure oneself against exchange rate volatility in either direction. just as importers may use forwards to buy foreign exchange, exporters may use them to buy their own currency. indirect consequences have given us a signal that these efforts need to be focused towards banking sector as well. although with the introduction of basel ii we should be aware that sometimes it can be pro - cyclical and short - sighted. the harm to financial stability of the systems that may arise from such behaviour of market participants especially during “ downturn ” phases of the business cycle, if not properly communicated and managed, may instigate systemic risk that could to a certain extent potentially backfire on financial institutions. even if we look at