This Selected Economic Issues paper for Bosnia and Herzegovina reports that output, exports, and incomes have increased and inflation has stabilized. New modern banking laws have been passed in both entities, and the banking sector has been almost completely privatized, with the majority of assets now under foreign ownership. The reforms to the central bank and to the banking system have been aimed to secure stability and to build an efficient financial system.
International Monetary Fund. External Relations Dept.
This paper highlights that in the first quarter of 1979, the IMF took further steps to enhance its ability to promote orderly world economic growth with reasonable price stability as a means of achieving a stable system of exchange rates. It adopted several measures designed to make the special drawing right the principal reserve asset in the world monetary system. The Interim Committee reaffirmed these aims, expressing broad support for measures that the IMF’s Executive Board has adopted, or is actively considering, in furthering these goals.
RECENT DEBATES on fixed versus flexible exchange rates have stemmed largely from concern that the par value regime set up at Bretton Woods has been too rigid, but a second frequent criticism is that, in practice, many Fund members have not adhered to par values. An impression commonly prevails that many members either have never established par values, or more often, once having established par values as a condition for access to Fund resources, have gradually conducted fewer transactions at foreign exchange rates based on these par values.1 Accordingly, for a great number of countries, par values are often thought to be nominal.
This paper assesses Serbia and Montenegro’s First Review Under the Extended Arrangement (EA). Serbia and Montenegro’s economic and policy performance has remained good under the current EA, but daunting challenges lie ahead. Macroeconomic policies need to be carefully calibrated to address potential risks to macroeconomic and financial instability, while the task of economic restructuring will be increasingly difficult. The IMF staff welcomes the authorities’ commitment to address delays in the adoption of reform legislation that led to nonobservance of some structural benchmarks and notes the need to avoid new slippages.