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01/12/2010

The following documents were adopted at 4th CBM Council meeting that was held on 30 November 2010 and chaired by the CBM Governor, Radoje Žugić, M.Sc.: Central Bank of Montenegro Policy for 2011, Guidelines for implementation of the Central Bank of Montenegro Policy for 2011, Recommendations to the Government of Montenegro for economic policy in 2011 and Inflation Report for Q3 2010.

Activities of the CBM in attaining basic objectives and functions in 2001 are defined in the adopted Central Bank of Montenegro policy and Guidelines for its implementation. The main priority of the Central Bank of Montenegro in 2001 will be the maintenance of monetary and financial stability, particularly paying attention to the banking system stability. In that respect, CBM will continue to develop monetary instruments (including also new instruments) and take necessary measures, under its competence, to strengthen confidence in overall financial system. Improvement in corporate governance and risk management in banking system will be enhanced. The Central Bank will fully support Government of Montenegro in 2001 in implementing economic policy, particularly contributing to acceleration of economic growth and development to the extent that will not bring into question attaining of objectives and constitutional responsibilities of CBM. In addition, CBM will actively participate in EU accession process of Montenegro, and it will function at the principles of socially responsible organisation, which will actively participate in developments of modern society.

Guidelines for the implementation of policy for 2011 defined in more detail actions for its implementation.

The Council also adopted Recommendations for economic policy for 2011.  Recommendations are grouped in eleven areas, and are complement to the policy that CBM will carry out in the following year. These recommendations are aimed at continuing the reforms, creating encouraging business environment, contributing to accomplishment of the projected economic growth of at least 3%, reducing current account balance of payment misbalance and encouraging activities in all key sectors.

The Inflation Report for Q3 2010 stated that the inflation was extremely low and that will range from 0.6% to 1.5% in 2010. This report also stated that Montenegro entered positive growth rates at the end of the third quarter 2010. Results of regular survey of CBM indicated that majority of surveyed companies expect employment growth and new investments, which point out that the continuance GDP growth may also be expected in 2011.

In addition, the Council continued with the practice of ongoing monitoring of the banking system concerning all performance indicators particularly in large systemic banks. The Council will pay special attention in future period to the permanent assessment of the system, and it will intensify activities on comprehensive review of effects arising from the implementation of new regulatory framework in order to act in a timely and efficient manner and, if needed, take corrective measures for further stabilisation and full safety of the banking sector.