УЛОГА ЦЕНТРАЛНЕ БАНКЕ У СТАБИЛИЗАЦИЈИ ДЕВИЗНОГ КУРСА
THE ROLE OF THE CENTRAL BANK IN EXCHANGE RATE STABILIZATION

Summary/Abstract: The subject matter of this paper is the role of the Central Bank in the foreign exchange market and its interventions assumed for the purpose of stabilizing the exchange rate. In this context, the author first explores the characteristics of the existing exchange rate models, focusing on the advantages and disadvantages in terms of their implementation. Further on, the author analyses the normative framework of the foreign exchange market in Serbia in order to determine the appropriate exchange rate regime which would be pertinent to the conditions in the national economy. The exchange rate is a very important indicator for monitoring and evaluating the state of economy in a community, as well as for determining its relationship with the economies of the developed countries in its immediate environment which a national economy would eventually like to draw closer to in the long run. Given the fact that the economic relations in an objective social reality are very dynamic and subject to diverse influences, it may be difficult to institute an exchange rate regime that will be optimal in a longer period of time.

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