radovan jelasic : issues of key importance for the national bank of serbia and also for the country speech by mr radovan jelasic, governor of the national bank of serbia, at the serbian economic summit, belgrade, 4 november 2008. * * * ladies and gentlemen, regardless of all political and economic challenges during the last two years, serbia managed to maintain its economic stability. and the challenges have been quite a few, what with things like adoption of the new constitution, early elections, presidential elections, kosovo issue and again early elections, oil and agricultural shocks, etc. however, the challenge we are currently facing comes from abroad and forces upon us a new set of rules, puts things into a different context and requires a different perspective – if not to adopt a completely new pattern of thinking and working criteria then at least to think and work faster and more efficiently. and though i am convinced that serbia will again be successful in fighting these difficulties, allow me to point out today some issues of key importance, not only for the nbs, but for the country as a whole. these are as follows : 1. market has grown less tolerant now of eventual mistakes in macroeconomic policy as we are still paying for the mistakes made in earlier years. the speed and intensity of change in the course of the last several days is unprecedented in modern history : spreads double overnight, first rate institutions lose their hard earned reputation, state ownership is not only commended but positively reflected in prices of shares, while valuation of balance sheet items at market prices – one of the key pillars of market economy – is suddenly put aside for better times. but what are the implications for serbia? the spreads are changing now, even the exchange rate, and we are receiving bills for all that we have not, or have only partially done. however, it is solely up to us how we shall proceed, whether we are ready for a complete overhaul or shall try to muddle through for some time yet. serbia still has two choices : a ) not to change anything of consequence or to make only slight changes which would contribute to further growth in consumption and increase the current account deficit, hence necessarily leading to a change in the exchange rate, problems in budget execution and higher inflation, or b ) to make a turnaround in its economic policy, freeze consumption and allow only for the increase in capital investment. fare meter is ticking and each day lost is a loss for serbia. i am convinced, however, that we not only

of monetary policy. the bank has been implementing powerful monetary easing under " quantitative and qualitative monetary easing ( qqe ) with yield curve control, " aiming to achieve the price stability target of 2 percent. this policy framework was introduced exactly a year ago, and at this meeting with you last year, i talked about the new policy, which had just been introduced. " qqe with yield curve control " consists of two components. the first is an inflation - overshooting commitment, in which the bank commits itself to expanding the monetary base until the year - on - year rate of increase in the actual cpi exceeds 2 percent and stays above that level in a stable manner. the second component is yield curve control, in which the bank controls short - and long - term interest rates under the guideline for market operations decided at every monetary policy meeting. looking back at the one year since its introduction, japan's long - term interest rate has been stable at around zero percent, which is the target level, and bank lending rates as well as issuance rates for corporate bonds have been at extremely low levels. moreover, financial institutions'lending attitudes as perceived by firms have remained positive both for large and small firms, and the year - on - year rate of increase in the amount outstanding of bank lending has been in the range of 3. 0 - 3. 5 percent recently. such highly accommodative financial conditions, as well as proactive initiatives by financial institutions, have been firmly supporting corporate activities in japan. although there is still a long way to go to achieve the price stability target of 2 percent, the bank will continue to persistently pursue powerful monetary easing with a view to achieving the target at the earliest possible time. thank you. japan's economy and monetary policy speech at a meeting with business leaders in osaka september 25, 2017 haruhiko kuroda governor of the bank of japan chart 1 real gdp ann., tril. yen real gdp ( level, s. a. ) cy06 source : cabinet office. chart 2 external demand exports global manufacturing pmi s. a., di global economy advanced economies emerging and commodity - exporting economies s. a., cy 2015 = 100 real exports cy10 cy10 notes : 1. figures in the left chart for the global economy are the " j. p. morgan global manufacturing pmi. " figures for advanced economies as well as emerging and commodity - exporting economies are calculated as