Governor Žugić attending the meeting of the Central Bank Governor's Club of the Central Asia, Black Sea Region and Balkan Countries
20/09/2018
The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, took part at the 40th meeting of the Central Bank Governor’s Club of the Central Asia, Black Sea region and Balkan countries, which is being held in Bucharest from 19 to 21 September.
This year's Governor's Club meeting is devoted to issues related to monetary policy and financial stability, with particular reference to the impact of the strengthening of the US dollar.
The participants of the meeting agreed that it is very difficult to predict the future dollar trend, given the frequency of changes in the exchange rate in the previous period. Therefore, it was specified that the dollar could affect financial stability and, further, the growth potential, but it is not expected to have a long-term impact, given that a strong currency can undermine competitiveness and have other negative consequences for the US economy. Specifically, there are different opinions about whether and to what extent a strong dollar contributes to the US economy, and for that reason some officials even think that a strong dollar burdens the US economy through the increasing competitiveness of Chinese companies.
"The interest rates that are higher in the United States than in the European Union and Japan, significantly low unemployment rate, and strong growth recorded this year all contribute to strengthening of the dollar, while its weakening is further affected by high levels of current account deficit, budget deficit and public debt in America", said Governor Žugić, adding that the dollar trend cannot endanger stability and soundness of the banking system in Montenegro, as the share of loans in this currency is negligible.
Governors and other top officials from area of monetary policy and finance exchanged views on other current issues and further improvement of mutual cooperation during the meeting.
The Central Bank of Montenegro is a member of Central Bank Governor’s Club of the Central Asia, Black Sea region and Balkan countries since 2005.