npls, while allowances for impairment ( under the ifrs ) covered 67 % of gross npls. movements in npls in the coming period will depend primarily on the situation in the real sector, but also on the domestic legal framework and its efficiency. confirming the commitment of competent government authorities to tackling npls in a systematic and comprehensive way, in august 2015 the government of the republic of serbia adopted the national npl resolution strategy. the strategy is being implemented by experts from the nbs, ministries of finance, justice, economy and construction, the deposit insurance agency and other competent authorities and institutions. the nbs has implemented all activities envisaged by the action plan. the results are already visible as npls fell by 4. 6 pp in 2016 to their lowest since january 2011. it is high time we dedicated a part of our future endeavours to increasing efficiency, availability and quality of services of the financial sector, particularly to ensuring further growth in sound credit activity. there are no perfect, competitive markets anywhere in the world, serbia included. from a social viewpoint, it is important that profit be at least partly transferred from companies to consumers, from banks to clients – in the form of lower prices and better services. we are confident that banks will be led by the objectives of long - term sound and sustainable operation, while at the same time mindful of the interests of financial services consumers. dear colleagues and friends, some people examine the past to define the future. i believe that we need to glance at the past only occasionally, just to be reminded of what we have learned and experienced, and look around us to see what we have accomplished, but that we must constantly look towards future challenges. this is the only recipe for success! and maybe, using the example of the nbs, in a part where we are similar to the economy, i could comment on it with mr [ group executive of market development for europe, jason ] lane, and invite him to help serbia, using the reputation of the large and well - known company such as mastercard, to preserve a domestic card called “ dina ” by co - branding, because until we value ourselves, we will not be valued by others. and i value the opinion of each and every one of you. thank you for your attention. 5 / 5 bis central bankers'speeches

low and stable inflation expectations of the financial and corporate sectors which are within the tolerance band. in terms of external factors, as in prior years, low inflation was maintained owing to low prices of primary products, as well as to generally low headline inflation in the international environment. the greatest contribution to inflation came from petroleum products, fresh meat, travel packages and administered prices ( chiefly cigarettes and electricity ). we expect inflation to move within the target tolerance band over the projection horizon. in the short run, a rise in inflation will be primarily driven by the low base effect from prices of petroleum products and the january increase in cigarette prices. in the medium run, a rise in inflation will be driven by an increase in aggregate demand and inflation abroad. the risks to the projection are judged to be symmetric and primarily relate to trends in the international financial and commodity markets, and the spill - over effect of global oil prices on the prices of petroleum products at home. also, the price trajectory will be shaped by the degree of success of this year ’ s agricultural season. ( slide 5 ) ladies and gentlemen, when all think likewise in the market, no one actually does any thinking. when the market consensus is achieved, markets grow more vulnerable than ever. we were not swayed by persuasions of many that brexit would not take place, or that surveys in the usa hinted at an unambiguous outcome of the presidential election. we were prepared for the “ unexpected ” and not for a moment did we let the turbulences roil the domestic market and reflect on the exchange rate. in times of tranquillity we were honing our defence system for the upcoming pressures, while in the times of turbulences we invested wisely in stability. from january 2008 to august 2012, the dinar lost 33. 2 % against the euro. since then, it has weakened seven and a half times less. at the same time, four times less fx reserves have been spent. i call this commitment, efficiency and conscientiousness, dedication to the general interest! ( slide 6 ) in 2016, the dinar depreciated by 1. 5 % against the euro. depreciation pressures mostly came from turbulences in the world financial markets which affected non - resident activity. appreciation pressures followed in july, aided by increased interest of foreign investors who wished to invest in dinar government securities, and these pressures lasted into the following months ( until november 2016 ). appreciation pressures were fuelled by a