The increased demand for euros at exchange offices is the result of a psychological effect and public anxiety, rather than a shortage of foreign currency, Du\u0161an Uzelac, editor of the Kamatica portal, told RTS. He stressed that the Alta Bank case cannot threaten the stability of the banking system and that there is no reason to panic.<\/p>\n\n\n\n
At some exchange offices<\/a>, the euro is being sold for 119 or even 120 dinars, while the official middle exchange rate has remained almost unchanged. Du\u0161an Uzelac, editor of the Kamatica portal, says that the increase in the euro’s price at certain exchange offices is primarily the result of a psychological effect and greater demand for cash, rather than an actual shortage of foreign currency.<\/p>\n\n\n\n \u201cI would say that some exchange offices are trying to take advantage of this situation. There is a very clear rule limiting the highest selling rate in relation to the middle exchange rate. There are no problems, no deficit and no shortage. Everything that is happening is short-term and psychological in nature,\u201d Uzelac points out.<\/p>\n\n\n\n He recalls that the euro exchange rate was also around 117.6 dinars in November 2021, which, he says, shows that the value of the domestic currency has remained within relatively stable limits for years.<\/p>\n\n\n\n He explains that citizens who purchase foreign currency at exchange offices account for a smaller share of the overall foreign exchange market, in which companies, corporations and public enterprises play a significant role, including those purchasing energy products.<\/p>\n\n\n\n \u201cIncreased demand for foreign currency is expected because of the season. Citizens who go to exchange offices are buying physical currency, meaning cash. Today, nobody has a problem purchasing foreign currency through a banking app. There are no restrictions or unusually high exchange rates,\u201d Uzelac says.<\/p>\n\n\n\n According to him, problems have emerged exclusively in the segment of the market dealing with cash, because supplying physical currency requires a certain amount of logistical preparation. He gives the example of a shop that normally sells one ton of apples a week and then suddenly faces demand for ten tons.<\/p>\n\n\n\n \u201cOf course, it takes time for the goods to be delivered and placed on the shelves. It is the same with exchange offices. If someone buys all the euros they have in the morning, they have nothing left to sell for the rest of the day. This primarily affects smaller exchange offices, which were unable to secure enough cash to meet the increased demand,\u201d Uzelac explains.<\/p>\n\n\n\n He adds that if there were more serious disruptions in the foreign exchange<\/a> market, significantly larger changes in the official middle exchange rate would also be expected.<\/p>\n\n\n\n \u201cThe middle exchange rate has barely moved despite everything that has been happening, which means these developments have had no major impact beyond the psychological effect,\u201d Uzelac says.<\/p>\n\n\n\n Speaking about the revocation of Alta Bank’s operating licence, Uzelac points out that the banking system relies heavily on the trust of citizens and businesses.<\/p>\n\n\n\n \u201cThe entire financial system is based on trust. We saw very quickly what happens when that trust is absent. Alta Bank’s liquidity fell, and when it drops below a certain level, protective mechanisms are activated,\u201d Uzelac says.<\/p>\n\n\n\n He explains that similar mechanisms are applied in other cases involving problems in banks’ operations, recalling the examples of Agrobanka, Privredna Banka Beograd and Univerzal Banka.<\/p>\n\n\n\n \u201cWhen it is announced that a bank is experiencing problems, creditors start withdrawing their money, which further reduces its liquidity. That is one of the factors that can lead to bankruptcy,\u201d Uzelac explains.<\/p>\n\n\n\n He stresses that, according to the information available to him, there are currently no indications that a major theft of money took place in the Alta Bank case. However, there are suspicions that certain activities were carried out in violation of banking procedures, which still needs to be established.<\/p>\n\n\n\n Asked whether the Alta Bank case could undermine confidence in the entire banking sector, Uzelac replies that confidence has already been shaken, but that this does not mean the stability of the system is under threat.<\/p>\n\n\n\n \u201cAlta Bank accounts for around three percent of the market. Its operations are under scrutiny as to whether they were conducted properly and whether there was embezzlement; all of that will be established. But that does not mean that the bank’s entire business was irregular. The banking system is one of the most regulated and most closely monitored systems, precisely because trust in it is so sensitive,\u201d Uzelac emphasizes.<\/p>\n\n\n\n Uzelac advises citizens currently buying foreign currency not to make decisions out of fear and, if they need to purchase it, to consider using banking apps.<\/p>\n\n\n\n \u201cIf you buy foreign currency now and sell it a month later, you will lose money on that transaction. Wait five or six days, and if nothing changes, then take action. I believe the logistical problems with delivering cash will be resolved during that period,\u201d Uzelac says.<\/p>\n\n\n\n As for whether to save in dinars or euros, he emphasizes that the decision should depend on the purpose of the money and when citizens plan to spend it.<\/p>\n\n\n\n \u201cSave according to the purpose of those funds. If you are going to spend the money in dinars in six months, there is no need to convert it into euros now. You always lose something in the conversion,\u201d Uzelac explains.<\/p>\n\n\n\n For money that citizens will not need for a longer period, he suggests considering the possibility of investing.<\/p>\n\n\n\n \u201cIf you do not need the money for more than six months, consider investing as well. That means converting money into something that is not money, and then following the market for that asset rather than just the exchange rate, interest rates and inflation,\u201d Uzelac says.<\/p>\n\n\n\n He concludes that the choice between keeping savings in a bank, holding cash, using a safe deposit box or investing depends on individual needs and preferences.<\/p>\n\n\n\n He believes that, because of negative experiences in the past, citizens often react out of fear and decide to withdraw their money even when there are no economic reasons to do so.<\/p>\n\n\n\n \u201cFear is not always something we can explain rationally. I believe the situation will calm down in a few days and that citizens will realize there is no reason to be concerned,\u201d Uzelac says.<\/p>\n\n\n\n According to Uzelac, Russian citizens and entrepreneurs who were clients of Alta Bank are facing a particular problem. They are now trying to open accounts at other banks so they can continue operating, receive payments and pay salaries.<\/p>\n\n\n\n \u201cExcept for a few domestic banks, the others are practising a form of quiet discrimination against Russian citizens. It is an open secret. Banks that receive instructions from Europe, and that includes most of the banking sector, have procedures that effectively tell them to avoid doing business with such clients,\u201d Uzelac claims.<\/p>\n\n\n\n According to him, this practice most often takes the form of administrative requirements, such as requests for additional documentation proving the origin of funds.<\/p>\n\n\n\n \u201cEverything is wrapped up in paperwork. They ask for proof of the origin of the money, certificates, stamps and other administrative documents. The bottom line is that they are turning them away,\u201d Uzelac believes.<\/p>\n\n\n\n He assesses that such conduct is a consequence of the European Union’s policy towards Russia, which, he claims, is also affecting banks in Serbia that are under European ownership.<\/p>\n\n\n\n \u017dOC CELEBRATES THE STUDENTS\u2019 VICTORY: \u201cI\u2019m happy with the election results in Serbia, and I wish young people all the best!\u201d (VIDEO)<\/strong><\/a><\/p>\n\n\n\n BEHIND BARS, VU\u010cI\u0106 HAS HIS STRONGEST SUPPORT: His list won more than 65 percent of the vote in prisons!<\/strong><\/a><\/p>\n\n\n\n A VICTORY RESONATING FAR BEYOND SERBIA\u2019S BORDERS: Swedish prime minister congratulates the students, saying: \u201cIt is time for democracy and the fight against corruption!\u201d<\/strong><\/a><\/p>\n\n\n\nWhy some exchange offices are limiting euro sales<\/h3>\n\n\n\n
\u201cThe Alta Bank case cannot put the entire banking system at risk\u201d<\/h3>\n\n\n\n
Is it better to save in dinars or euros?<\/h3>\n\n\n\n
\u201cQuiet discrimination\u201d against Russian citizens<\/h3>\n\n\n\n
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