move around the target midpoint in the year that follows. the stability of the exchange rate has become a new normal for serbia. before august 2012, stronger volatility was allowed, which led to the strengthening of inflationary pressures, business uncertainty, high exchange rate differences and the increase in 1 / 3 bis - central bankers'speeches non - performing loans, whereas from that time on, one of the basic characteristics of the national bank of serbia and the overall financial system is the relative stability of the exchange rate of the dinar against the euro. record high fx reserves of over eur 25 bn at end - may are an important factor of our country's stronger resilience to any potential shock from the international environment. economic activity stepped up to 4. 7 % y - o - y in q1. we expect economic growth to reach 3. 5 % in 2024 overall, and to accelerate to 4 – 5 % from 2025, supported by investments within the " leap into the future – serbia 2027 " programme, subsiding global inflationary pressures and more favourable financial conditions. owing to the generally good economic situation in the country, a significant number of banks expect loans to the corporate and household sectors to grow by over 5 % this year and next, as reported in the latest bank lending survey. the trust we have built is best confirmed by the growth in savings and their record levels. namely, dinar savings rose from under rsd 18 bn at end - 2012 to over rsd 159 bn now and fx savings from eur 8. 3 bn to eur 14. 9 bn. all data show that we managed to preserve and additionally strengthen the stability of the banking sector despite the numerous challenges and risks which serbia, as a small and open economy, was exposed to in the prior period. this was also recognised by international investors and rating agencies. in april 2024, standard & poor's upgraded serbia's outlook from stable to positive, placing our country at a half a step away from investment grade. the national bank of serbia's unwavering commitment and a proactive approach, along with the constructive cooperation of the banking sector, have created the regulatory prerequisites for the approval of numerous debt repayment facilities to businesses and households, facilitated natural persons'access to bank financing and improved the protection of the interests of financial services consumers. and why do i always say that our successes are shared – because we would not be able to do it without

jorgovanka tabakovi : stability of the banking sector in serbia preserved and additionally strengthened introductory speech by dr jorgovanka tabakovi, governor of the national bank of serbia, at the annual assembly of the association of serbian banks, belgrade, 18 june 2024. * * * ladies and gentlemen, dear marina, esteemed fellow bankers, it gives me great pleasure to welcome you to the annual session of the assembly of the association of serbian banks, a business association that has been contributing to the development of the banking sector and the modernisation of financial services in serbia for more than 100 years. through solid partnership and cooperation, the national bank of serbia and the association of serbian banks promote transparency in work and coordination of activities, all with a view to achieving one and the same goal – preserving the stability of the banking sector of serbia and strengthening its resilience to challenges. the stability of the financial system is a shield against economic disruptions and changes, as well as a vital link on the path to sustainable economic development. by strengthening the stability of the financial sector, we lay the groundwork for long - term economic growth and ensure a better standard for all our citizens. delivering financial stability is a continuous process. we build trust, as the key ingredient in this context, through strategic risk management and a proactive regulatory approach. for a number of years already, the national bank of serbia has succeeded in ensuring price and financial stability by taking well - timed and appropriate decisions. we used the period of low and stable inflation to strengthen financial stability by bringing all parameters to the levels that are well above the regulatory minimums. the stability of the financial system was also confirmed during the last four years marked by an unprecedented multidimensional crisis, which shows the importance of a coordinated monetary and macroprudential policy. thanks to the flexibility of our monetary framework, we tightened monetary conditions gradually and measuredly, without endangering the stability of the financial system at any point. we managed to return inflation on a downward path and in may, in accordance with our projections, it returned within the target band, to 4. 5 %. with this in mind, the executive board assessed that the conditions have been created for the start of monetary policy easing through the reduction of the key policy rate, which was trimmed after almost a year by 25 bp, to the level of 6. 25 %. we expect that inflation will continue to slow until the end of the year and that it will