Amendments to the Law on Public Debt

At the session held on December 10th, 2020, the National Assembly of the Republic of Serbia adopted the Law on Amendments to the Law on Public Debt (“the Law“), as part of the economic reforms that are currently being implemented.

The most important changes are as follows:

• terminological harmonization is performed by introducing the definition of Hedging, as an instrument of protection against financial risk;
• the possibility is introduced that the Republic of Serbia can finance projects by issuing government securities, namely those projects that are provided by the Law on Budget of the Republic of Serbia and in the amounts provided by that Law;
• the possibility is introduced that another minister, apart from the previous Minister of Finance, can conclude a loan agreement;
• it is specified which types of financial risks are supposed to be reduced or eliminated and what is the way to achieve it;
• in the article regulating the competence of the Public Debt Administration, as an administrative body within the Ministry, two new points are added which aim to recognize in the Law the activities of the Public Debt Administration related to the government securities market and to anticipate the possibility of reaction by the Public Debt Administration if it notices some irregularities in the work of participants in the primary securities market.

At the end of October, Serbia’s public debt amounted to 27 billion euros.

The goal of the latest legal changes is to enable more efficient operation on the capital market in order to manage the financial risks that may arise in connection with the borrowing of the Republic of Serbia, and thus enable more efficient management of the public debt of the Republic of Serbia.