EFFICIENCY AND MONETARY POLICY LIMITS IN BIH, SERBIA AND CROATIAИван Мировић, Весна Петровић |
Published 10/31/2018 |
ABSTRACT
Economic problems in terms of neo-liberalism and transition, poor and unsuccessful privatisation in BiH, Serbia and Croatia are almost identical, but the monetary framework differs. BiH has a currency board, Serbia has a policy of inflation targeting, and Croatia has nominal anchor exchange rate (managed regime of floating exchange rate). On the question what is the monetary strategy which proved effective in managing the crisis and its consequences there is no adequate and satisfactory answer. Namely, the three studied countries are small, open transitional countries, highly pro European, with underdeveloped institutions and financial structure, sensitive to changes in exchange rates, and suffer the limitations of economic and financial system, especially in conditions of crisis in the conduct of an active and independent monetary policy. Despite, the objective of the central bank, to promote the general policy of the state and a different institutional structure of central banks in these countries, and their irreducible functions, CB BiH operates in currency board regime, while the central Bank of Serbia and the Croatia operate in the regime of “quasi currency board”, there is unity of purpose, price stability, exchange rate and financial stability. The common denominator of the monetary policies of the central banks of Bosnia and Herzegovina, Serbia and Croatia is that these are not sufficiently independent, active and developmentally oriented.
Keywords: monetary strategy, the currency board, inflation targeting, the nominal anchor exchange rate, regime of managed floating, exchange rate, price stability.