Montenegro, Round table discussion in Rijeka – All about challenges of monetary policy

Published on 9. April 2023., News

Due to the absence of the emission function, the Central Bank of Montenegro does not have such a strong influence on price stability, said the governor of the Central Bank, Radoje Žugić. Nevertheless, through the policy of mandatory reserves and macroprudential measures, we can influence the credit potential of banks, i.e. the dynamics of credit activity in a certain period of time, and thus indirectly also the demand, i.e. prices – said Žugić at the regional meeting of governors in Croatia.

As announced by the Central Bank, the main topic of this year’s meeting is related to the challenges currently faced by the creators of monetary policies in the region, in the context of the current macroeconomic situation and the global environment.

Governor Žugić, together with the governors of the central banks of Croatia, Slovenia, Bosnia and Herzegovina and North Macedonia, participated in a round table held at the Faculty of Economics in Rijeka. The leaders of the monetary authorities of the region had the opportunity to discuss with students, representatives of the academic community and Croatian businessmen the challenges of monetary policy in small open economies, especially in the light of high inflation – the announcement states.

Introductory speeches were given by Saša Drezgić, Dean of the Faculty of Economics and Vedran Šošić, Chief Economist of the Croatian National Bank. In the following, the governors, based on the experiences of their countries, discussed monetary policy in conditions of rising inflation, as well as the room for maneuver that central banks of small open economies have in the event of global inflationary shocks. The discussion also referred to the impact of the monetary policy of the European Central Bank and the transfer of rising interest rates to the interest rates of countries outside the euro area.

The annual meeting of regional central bank governors, which brings together governors, representatives of banks and the financial sector, aims to improve cooperation, exchange experiences and discuss current challenges related to key areas of financial stability.