The European Commission (EC) and the European Central Bank (ECB) have given positive evaluations on the activities of the Central Bank of Bosnia and Herzegovina which took place in 2020, under extremely complex pandemic conditions, announced the Central Bank of Bosnia and Herzegovina. Bosnia and Herzegovina.
“The Central Bank of Bosnia and Herzegovina (CBBH) continued to maintain full convertibility of the national currency in 2020, despite challenges related to the economic consequences of the pandemic caused by the COVID-19 virus. Monetary policy continues to be based on a currency board arrangement enjoying a high level of credibility with the general public and which is the key to monetary stability based on the independence of the Central Bank ”, he added. it was concluded during the economic and financial dialogue between the European Union (EU) and the Western Balkans and Turkey, which took place on July 12, 2021.
CBBH recalled that for the purposes of the annual economic dialogue between the EU and the Western Balkan countries and Turkey, the EU institutions regularly carry out analyzes related to the implementation of economic policies and provide analyzes on the issues and directions previously discussed.
In its annual assessment on monetary policy and financial stability, the ECB underlined that the CBBH has made significant progress in implementing the guidelines formulated the previous year in the framework of the economic dialogue between the EU and the Western Balkans and Turkey. The implementation of full local currency convertibility proceeded without any turbulence, which is particularly important in a complex institutional environment in BiH, therefore it is recommended to continue this practice and ensure the full independence of the CBBH.
In addition, based on the ECB’s recommendations, in 2020 additional analytical research has been introduced regarding inflation expectations and lending, which is carried out on a regular basis. A macroeconomic model has been developed and, on this basis, the CBBH produces and publishes macroeconomic projections. In addition, the ECB stresses that the adoption of the BiH deposit insurance law is important to strengthen the regulatory banking system.
The European Commission also welcomed the activities of the CBBH in the field of statistics and the progress made in government finance statistics, as since October 2020 an important step has been taken by providing data to Eurostat. Improvements were also made with regard to the timeliness and consistency of quarterly data submitted in the area of balance of payments and international investment position statistics, it said in a statement.