The KCB managed to meet its goals even while the international financial system was facing “one of the worst crises in history”, bank Governor Hashim Rexhepi said.
Kosovo is taking various steps to pre-empt the effects of the global economic crisis. Among them is the creation of a multi-agency committee to protect the fledgling country’s financial stability.
The committee’s creation follows the signing of a joint memorandum of understanding by the Kosovo Central Bank (KCB), finance and economy ministry and parliament’s commission for budget and finance.
According to the KCB, the committee has already held its first meeting and defined its objectives.
The bank’s main goal for 2009 is to have the country join the IMF.
KCB Governor Hashim Rexhepi has spoken to the press often about government efforts to combat the crisis. The bank managed to meet its goals even while the international financial system was facing “one of the worst crises in history”, he said on Tuesday (March 10th). He also said, speaking to state-owned broadcaster RTK, that Kosovo’s own financial system is “stable”.
The government contends it preserved economic stability and achieved generally encouraging results, even though the nation’s Pension Fund suffered a sharp drop in the value of its portfolio when its investments abroad lost value.
Those losses totalled 100m euros in 2008 and approximately 8m euros in January alone; however, Rexhepi says the fund’s loss was proportionally “less than that in the financial markets”.
The government argues it has taken vigourous measures to combat the crisis. Among them are the creation of a 200m-euro fund, should any Kosovo economic sector need an emergency infusion of cash; careful management of the KCB’s assets; greater monitoring of the country’s banks; and the enhancement of co-operation between the KCB and other central banks.
Pristina also cut various taxes starting January 1st in hopes of stimulating consumer spending and foreign investment. Income taxes do not exceed 10%, while the corporate income tax is a flat 10%.