Press Releases 2011 - April

28.04.2011 - Meeting of the Governors of the Central Bank of Bosnia and Herzegovina, the Central Bank of Montenegro and the National Bank of Serbia

20.04.2011 - The Governor’s meets the IMF Deputy Managing Director

19.04.2011 - Improved Macroeconomic Trends

11.04.2011 - Twelfth CBM Council Meeting

01.04.2011 - CBM delegation Attended the 85th Anniversary Celebration of the Bank of Albania

CENTRAL BANK OF MONTENEGRO
Sarajevo, 28 April 2011

Meeting of the Governors of the Central Bank of Bosnia and Herzegovina, the Central Bank of Montenegro and the National Bank of Serbia

The meeting of delegations of the Central Bank of Bosnia and Herzegovina (CBBH), the Central Bank of Montenegro (CBM) and the National Bank of Serbia (NBS) was held on 28 April 2011 in Sarajevo. The Governor of the CBBH, Mr. Kemal Kozarić, the Governor of the CBM, Mr. Radoje Žugić, and the Governor of the NBS, Mr. Dejan Šoškić, discussed the current level of cooperation as well as its continuation in line with the protocols on cooperation signed by the central banks.

The governors discussed the conclusions from the previous meetings and later on presented macroeconomic trends and indicators prevailing in their countries. It was also concluded that a common system of reports will be established for these meetings to contain a set of indicators serving for the comparison of macroeconomic environment in the countries.

The thematic part of the meeting and the presentation of the managers of the CBBH Financial Stability Department of "The Analysis of Financial Stability in the CBBH" were assessed as very useful.

The final conclusion highlighted the need not only for the continuation, but also for deepening the cooperation, subject to subsequent defining of areas of cooperation at the level of the governors of the central/national banks. Dates of future regular meetings were generally agreed, and the conclusion was that invitations to join this group will also be sent to the central/national banks of Croatia, Bulgaria, Macedonia and Albania. In the future, the meetings will be held twice a year, in spring and autumn.

The next meeting will be held in Montenegro.

CENTRAL BANK OF MONTENEGRO
Podgorica, 20 April 2011

The Governor’s meets the IMF Deputy Managing Director

Delegation of the Central Bank of Montenegro, headed by the Governor Mr. Radoje Žugić, had a meeting with the Deputy Managing Director of the International Monetary Fund, Ms. Nemat Shafik, during the Spring Meetings of the IMF and the WB in Washington, D.C.

It was agreed that Montenegro made progress over the previous period and the parties also discussed current macroeconomic indicators and the financial system condition, highlighting the importance of taking preventive measures in the following period.

During the meeting, the Governor pointed to excellent cooperation of the CBM and the IMF and expressed the CBM`s appreciation for the IMF support extended so far, underlining the importance of deepening very good relations between Montenegro and the IMF.

Ms. Shafik confirmed the continuation of expert technical support and offered any other assistance Montenegro deem necessary.

The Governor invited the IMF Deputy Managing Director to visit Montenegro in the upcoming period.

CENTRAL BANK OF MONTENEGRO
Podgorica, 19 April 2011

Improved Macroeconomic Trends

Delegation of the Central Bank of Montenegro and the Ministry of Finance, headed by the Governor Mr. Radoje Žugić and the Minister of Finance Mr. Milorad Katnić, attended the Spring Meetings of the International Monetary Fund (IMF) and the World Bank (WB) held in Washington, D.C.

Representatives of the Montenegrin delegation had several meetings with high representatives of the WB and the IMF, as well as with the WB Vice-President for Europe and Central Asia Region, Mr. Philippe Le Houerou.

Joint conclusions from the meetings are that the macroeconomic, monetary and fiscal developments, as well as the financial system of Montenegro have improved, with positive trends expecting to continue despite many remaining challenges.

Representatives of the WB and the IMF extended their congratulations on the successful Eurobond issue and improved of credit rating of Montenegro.

Technical expert assistance was agreed at the meeting with representatives of the IMF, while the WB representatives acknowledged the progress in meeting the prerequisites for the World Bank development policy loan, for which negotiations should begin in the middle of May.

CENTRAL BANK OF MONTENEGRO
Cetinje, 11 April 2011

Twelfth CBM Council Meeting

The twelfth meeting of the Council of the Central Bank of Montenegro, chaired by the Governor Mr. Radoje Žugić, was held today at Cetinje.

The Council adopted the Central Bank of Montenegro Annual Report, Financial Statements and Auditor's Report 2010, Financial Stability Report and the Annual Inflation report. The CBM Annual Report is submitted to the Parliament for its consideration, and for the first time, pursuant to the Central Bank of Montenegro Law, the Financial Stability Report and the Annual Inflation Report will be submitted to the Parliament for information purposes. The Financial Statements and Auditor's Report 2010, as a part of the CBM Annual Report, is also submitted to Parliament for information purposes.

The CBM Annual Report analyzed macroeconomic environment in which monetary policy was carried out, as well as the execution of CBM Policy for 2010. This Report provided macroeconomic forecasts for 2011, as well as CBM Policy with guidelines for 2011. The Report stated the following: monetary and fiscal stability was maintained in 2010, intensified supervision of the banking system with significant recapitalization of banks was present, the payment operations functioned efficiently with some minor delays, international reserves were placed following the principles of soundness and liquidity, and the CBM contributed significantly to the EU accession process.

The analysis of financial statements pointed to the most important reasons and activities leading to gaining revenues and execution of expenditures in 2010. The following financial reports were compiled pursuant to International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS): Balance Sheet and Income Statement as of 31 December 2010, Cash flow statement in 2010, Balance sheet and Statement of changes in capital as of 31 December 2010. The report indicated that total CBM revenues amounted to EUR 13.47 million in 2010 and that they declined by 20% in relation to revenues recorded in the previous year. Total expenditures amounted to EUR 12.44 million, being by 24% lower in relation to expenditures recorded in 2009. The Auditor’s report stated that financial statements present fairly, in all material respects, the financial performance of the CBM.

The Financial Stability Report recognized that the existing risk level may be characterized as moderate. Banking system is sound and highly liquid, yet there is high level of non performing assets. Further increase in economic illiquidity has been indicated as the element of financial system stability risk. Capital market is still in turmoil, but it has not had strongly affected the financial system stability yet. Besides the standstill at the insurance market, it is stable and does not represent a threat to the financial system stability. The level of public debt is moderate, but its increasing trend is for a concern. The gradual recovery of the real estate market is expected, and the expected growth in 2011 will have positive effects to the financial stability.

The Inflation Report pointed to extremely low inflation rate in the previous year. The increase in prices is expected in 2011, primarily as a result of external factors. Prices of food and fuels have already increased at the global market. The recovery from the crisis has affected the increase of aggregate demand globally, and there are already visible pressures to the price increase, as a result of expansive measures of monetary and fiscal policy applied in combating the crisis.

The forecasted inflation in 2011 will range between 2.75% and 4.75%, but there is high level of uncertainty due to transmission of negative shocks from the global market. Moreover, natural disasters and political instability (primarily in countries exporting fuel) additionally pressure the price growth.

CENTRAL BANK OF MONTENEGRO
Podgorica, 01 April 2011

CBM delegation Attended the 85th Anniversary Celebration of the Bank of Albania

Delegation of the Central Bank of Montenegro, headed by the Governor Mr. Radoje Žugić, attended the ceremony organized by the Bank of Albania on 31 March 2011 on the occasion of celebrating the 85th anniversary of the Albanian national currency – Lek. The ceremony, which was one of the most important events in economic history of Albania and its Central Bank, was also attended by the governors of the central banks of Greece, Slovenia, Turkey and Kosovo, as well as by high officials from the central banks of Bosnia and Herzegovina, Bulgaria and Romania.

The CBM delegation attended the opening of the Numismatic Museum which officially started with the cutting of ribbon by the Governor of the Bank of Albania, Mr. Ardian Fullani, and the Prime Minister of Albania, Mr. Sali Berisha. Among the Albanian banknotes and coins issues throughout the previous century, there was also a Montenegrin banknote of 50 Perpers which was used in Albania with the permission of Italy over 1913-1914, as a part of the international contingent.

The Governor and the Executive Director of the CBM attended the symposium which followed the opening of the Museum whereat some historical aspects of the national currency were discussed.