The dollar is strengthening, and the euro is under pressure, is a warning that has been current for months, and problems in the energy and currency sectors are already noticeable on European soil. The value of the euro varies, and recently reached its lowest value against the dollar in recent years. As the convertible mark is linked to the euro and moves along with it on the market, the variation and weakening of the euro against the dollar, experts say, has no implications for the domestic currency. However, the attitude of bankers is that due to inflation, there may be problems in the banking sector in the long run.
Euro banknotes have been in use since 2002, and after 20 years, the US currency has strengthened slightly against the European currency. The euro is under pressure due to the war in Ukraine, because energy prices are rising, there are problems in the delivery and trade of oil and goods, and the European Central Bank is refraining from raising interest rates. Experts say fluctuations in the euro-dollar ratio are not a concern for BiH. The reduction of the money supply and the panic of the citizens are worrying.

“We should not be afraid that the relationship between the KM and the euro will change, because this is the procedure outlined through the Dayton Agreement and everything that happened later, so this key currency for us, the euro, will continue to be a strong stronghold for us. the euro does not change something important in its structure, it will not change in BiH either “, says Željko Rička, professor at the Faculty of Economics in Zenica.

However, the Association of BiH Banks warns that the fall of the euro against the dollar has an impact on the convertible mark. They say that every fall of the euro means a fall of the mark. The dollar and the euro are changing in value due to the US relationship with Europe, and the entire European economy is weakening due to inflation.

“Unfortunately, this change with inflation will be long-term, and when we look not only at banks, but also at citizens, the value of money will fall as much as inflation, which is at least 8 percent, and the growth of salaries of our citizens will hardly be higher than 1 to 2 percent. This means that the loss of standards for the entire population will be caused by this inflation in the banking sector, since interest rates will not be able to rise as much as they should “, notes the director of the Association of BiH Banks, Berislav Kutle.

It is encouraging that the BiH brand is stable and fixed, confirmed the Central Bank of BiH. Monetary policy is reflected through the currency board mechanism, which means that each banknote has its full coverage in euros.

“Citizens can be sure that the convertible mark cannot devalue against the euro. Given that the KM is pegged to the euro, the purchase of KM is carried out at a fixed exchange rate that all these years has contributed to achieving monetary policy goals through, inter alia, preserving monetary stability and preserving financial stability, “said the Central Bank of BiH. .

In the long run, all this depends on the steps of the European Central Bank and whether it will tighten its monetary policy and raise interest rates in order to reduce inflation in the eurozone. This would negatively affect the financial sector in BiH. Can we find a solution on our own?

“There is no answer, because the whole problem is that we have made the entire global economy so that no one produces anything. Every country must maintain self-sustainability, and that is that we produce and make at least 50 percent of our food needs in our own factories “, believes economic analyst Zoran Pavlović.

The United States is announcing a tightening of monetary policy to curb excessive inflation. Whether everything will affect us is unknown, but experts advise: do not panic and over-buy, because our actions affect the value of the domestic currency.

Link: https://business-magazine.ba/2022/05/23/oscilacije-odnosu-euro-dolar-strucnjaci-uvjeravaju-konvertibilna-marka-stabilna-fiksna/