, the country's fx reserves hit their record high of eur 21. 2 bn. last year, the national bank bought eur 1 bn net in the interbank fx market. since the start of this year, we have bought additional eur 435 mn net. confidence in the financial system has also been preserved, as confirmed by the continued rise in total deposits in banks, which in late 2022 exceeded the 2019 figure by over 40 %. the npl share in total loans was reduced to a record low of 3 % at end - 2022. during the three crisis years – from 2020 to 2022, serbia was recording real economic growth of around 9 %. this year, real growth is expected to equal between 2 % and 3 % and gdp per capita to reach around eur 10, 000 for the first time. the unemployment rate is at its lowest, and private sector formal employment at its highest – close to 10 % above the pre - pandemic level. this means that 150, 000 more people are employed now than before the pandemic. in december, total average wage was higher by 36 %, while private sector wage exceeded the precrisis figure by as much as 46 %. we have also ensured conditions to attract a record high level of fdis, worth eur 4. 4 bn last year, i. e. 7. 1 % of gdp. stability and resilience of the domestic banking sector ladies and gentlemen, i began my address with the macroeconomic environment in which banks in serbia operate as trends in the financial industry always depend on real sector developments, and vice versa. good regulations and efficient supervision of financial institutions are also important. while some countries have a complicated supervision system and a huge problem of coordination among different supervisors, the banking sector supervisory function in serbia is exercised by a single institution – the national bank of serbia. the advantages of such organisation of the supervision system and the quality of supervision are reflected in a stable financial system. it is confirmed now as well – during the current developments in the international financial market – that the national bank of serbia is rightly cautious in easing its regulations. we do nothing " on request ". we do not fulfil anyone's wishes as we are guided by financial system security and the protection of interests of depositors and bank clients. this is our statutory objective and it is only in such way that we can best contribute to overall stability. that the nbs's approach is adequate

nbs has a limited impact on the real exchange rate in the longer run, and can have a significant influence only in the short run. adoption of alternative exchange rate regimes cannot resolve the problem of the real exchange rate. it is, of course, my intention to also tackle on this occasion the other aspect of macroeconomic policy – fiscal policy. it deals with tax revenue which the state can extract from the economy and the amount of money it must spend. i do not wish to debate here the optimum size of the public sector, though it is only natural that i should have an opinion on that matter. i wish to underline, however, that changes in fiscal policy have very important implications on monetary policy, real interest rate and the real exchange rate as specified by the government in both the budget and the memorandum on economic policy for 2008 - 2010. hence comes my fourth message that monetary policy can be applied to keep inflation under control at low and stable level, but how tight should such policy be to achieve its aim, depends to a large extent on fiscal policy, too. the increase in public spending that is not covered by an increase in regular public receipts, or a significant reduction in tax receipts without comparable reduction in public spending, shall have its implications on the level of interest rates and the exchange rate for the dinar. i think that many exporters are aware of the significance of this dependence. my fifth message is that an exporter - friendly macroeconomic environment assumes low rate of inflation, gradual decrease in real interest rates and implementation of responsible fiscal policy. however, these can provide only indirect help in view of the reality facing the ever increasing number of exporters. the fact is that, in the longer run, world prices are falling in real terms. it is a long - term trend, of course, and has nothing to do with macroeconomic policy. improvement in productivity, product quality adjustments to market requirements and better marketing are at least as important as macroeconomic policy. these are the real challenges facing the exports sector worldwide! my sixth and final message is that the role of the nbs is not to hermetically isolate serbia from exchange rate changes coming from abroad but to secure conditions that would protect the economy from such risks. the price of oil has been continually increasing since the beginning of the year, prices of metals are several times higher now than few years ago, electricity prices are three times higher now than on the onset of transition. “ market is merciless place and carries