Since 2007 foreign exchange reserves dropped by 800 million BAM

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Source Glas Srpske, 08. 07. 2010.
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	Centralna Banka BiH Sarajevo.
	Udruženje ekonomista RS S.W.O.T. Banja Luka.
	Međunarodni monetarni fond predstavništvo u BiH.
	IMF Washington D.C..
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	Aleksandar Ljuboja
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Foreign exchange reserves were reduced by 800 million BAM, in B&H for the past three and a half years, and currently they amount to 5.9 billion BAM, according to data provided by the Central Bank. The bank said that the outbreak of global financial and economic crisis made foreign exchange reserves to drop.

"At the end of 2005 the foreign exchange reserves amounted to 4.2 billion BAM, in 2006 5.4 billion, 2007 6.7 billion BAM. 2008 recorded a decline amounting to 6.3 billion BAM, while at the end of 2009 there was a fall leaving the reserves with 6.2 billion BAM. BH Foreign exchange reserves currently amount to 5.9 billion BAM, " they said from the Central Bank.

They point out that reduction in the reserves affects the amount of domestic currency in circulation and thus leads to a reduction of consumption. "The reduction in reserves does not affect the stability of the exchange rate of the convertible mark, given the fixed exchange rate of the mark and euro," said the bank. The President of the Banking Association RS SWOT Ljuboja Aleksandar, said that a continuing decline in foreign reserves can lead to certain problems.

"Due to the economic crisis new values are not being produced and export is not increasing the foreign currency reserves. On the other hand, there is also a negative effect of the falling reserves due to halt of the money inflow from abroad. The consequences are immediate, especially on paying off of foreign debts" said Ljuboja.

He added that this is just one part of the real problem. "We must act in the sector of financial reality, create a new value, increase exports and thus the inflow of foreign currency will rise," said Ljuboja.

Compared to the end of 2009 the foreign exchange reserves are shorter of some 300 million BAM, but from the Central Bank they say that there is no room for concern. "The reduction in reserves is a result of shrinking economic activity. It is expected that the upcoming tourist season and people coming from abroad to Bosnia together with the realization of some ongoing foreign investment, and payment of the fourth loan tranche to the IMF, will increase the amount of foreign exchange reserves," said the Central Bank.

They add that the foreign currency deposits are held in Euros, with the important part of monetary gold whose value is expressed in dollars.