Exchange offices ready for yuans - NBS still awaits official initiative to add Chinese currency to its currency list

Three months after Russia's ruble was finally added to the list of currencies accepted by exchange offices in Serbia, the same thing is now expected to happen with China's yuan.

An initiative for this came from the Serbian Chamber of Commerce, where people believe that to be a way to significantly improve the cooperation between China and our country. As it was the case with ruble, the question that arises is whether there are enough interested people when it takes so long to add new currencies?

People at the National Bank of Serbia (NBS) say to eKapija that an official initiative has not been submitted to them yet, adding that they've learned that its preparation is underway.

- Upon receiving this initiative, NBS will be able to relatively quickly consider the advantages and disadvantages of the expansion of the list of currencies traded in the local foreign exchange market and possibly implement the process of introducing the Chinese currency in the local FX market - people at the central bank explain to our web portal.

On the other hand, people in Serbia have no doubt that the introduction of Russian and Chinese currencies will only do good to our economy. Most of them believe that both China and Russia are long-time economic superpowers and that Serbia, therefore, must also have their currencies on its official currency list because that will make it easier to avoid conversion through another currency if there is economic cooperation between our country and China and Russia.

Ruble introduction proves to be success

Exchange offices in Serbia trade rubles since October and, as people working at them say, that step has proved to be a big success.

Gizela Mesaros, manager of development, legal and general affairs at Exclusive Change exchange offices, says to eKapija that people were coming to them and asking about ruble before it was introduced, adding that the Russian ruble is now traded in all their offices.

Exclusive Change welcomes the introduction of each new currency, given that, as we've been told, this chain of exchange offices operates in Hungary, Serbia, Croatia and, since recently, in Bosnia-Herzegovina, and buys and sells all lawful currencies in all these markets.

People at exchange offices explain to our web portal that the introduction of yuan would be a positive step, adding that there is already interest in trading the Chinese currency, mainly in Belgrade, since it is the place where most Chinese in Serbia live. On the other hand, there are many people from Serbia working in Russia, and it is more cost-effective for them to exchange dinars for rubles in Serbia than in, for example, Moscow.

Attracting Chinese investors

Although there are many citizens of China living in Serbia, yuan introduction is primarily intended for businessmen. The expanded currency list should improve the economic cooperation between China and Serbia and make it possible for businessmen to avoid paying large commissions.

In any form of business cooperation or investing, dinar is first converted to dollar, which is then converted to yuan, with a substantial amount of money lost in the process. People at the Serbian Chamber of Commerce point out that it is also a way to make it easier for prospective Chinese investors to get funds in their country for big projects in Serbia.

- The central bank of China already uses developed procedures for funding large projects abroad, in line with the go global policy, that is, foreign investment policy - says Milanka Stojakovic from the SCC, who is in charge of monitoring Serbia's business cooperation with China.

Among the largest Chinese investments in Serbia at this moment are the Zemun-Borca Bridge and the Kostolac B rehabilitation.

Serbia signed a Strategic Partnership Agreement with China three years ago, which served as a basis for cooperation between the two countries in a variety of areas. Based on that Agreement, implementation of several joint projects has been launched, the funding for which has been provided from a loan extended by China's Exim Bank. The plan is to resume this cooperation through the construction of traffic and energy infrastructure, which will be financed with the proceeds of a new loan amounting to USD 1.8 billion.

Chinese companies have already been present for several years in Serbia, where they construct highways, bridges, tunnels. All these projects are built by the same principle: the governments of Serbia and China agree the implementation of joint projects, China's Exim Bank approves a loan, and construction companies from both countries are appointed as contractors. Since that model has proved to be successful, some new projects are already in the pipeline.

Jelena Djelic