Core functions of the National Bank of Serbia are laid down in the Constitution of Serbia and the Law on the National Bank of Serbia ("RS Official Gazette", No. 72/2003).

Pursuant to Article 2 of the Law on the National Bank of Serbia, the National Bank of Serbia is the central bank of the Republic of Serbia and as such its main responsibilities are the protection of price stability and maintenance of financial stability.

Core functions of the National Bank of Serbia include determining and implementation of the monetary policy, as well as that of the dinar exchange rate policy, management of the foreign currency reserves, issue of banknotes and coins, and maintenance of efficient payment and financial systems.

Subject to the Law on the Supplement to the Law on the National Bank of Serbia ("RS Official Gazette", No. 55/2004), the scope of competence of the National Bank of Serbia has been expanded so as to include insurance supervision (issuing of insurance, reinsurance, brokerage licenses).

The Law on the National Bank of Serbia further stipulates that in carrying out its responsibilities the National Bank of Serbia acts an autonomous and independent institution. It is not obliged neither to request nor to take instructions from the government institutions or other bodies. That is to say, on the basis of the determined economic policy targets and key macroeconomic indicators adopted by the Parliament, the National Bank then independently sets forth its projections of monetary and credit aggregates growth relative to the set targets and develops the monetary and credit policy measures that are to be implemented. The National Bank Governor attends the Government sessions on occasions when the proposed agenda includes issues related to the work of National Bank of Serbia. Also, the National Bank of Serbia passes an opinion on the certain enactments related to the budgetary, economic and fiscal policy issues, as well as on the draft laws and other legal regulations within its scope of authority. The National Bank of Serbia determines the dinar exchange rate regime, given the Government approval, whereas in administering the determined dinar exchange rate policy it assumes independent authority.