NBS October foreign exchange reserves amount to EUR 9.7 billion – Dinar appreciates against euro by nominal 0.1%

Foreign exchange reserves of the National Bank of Serbia (NBS) amounted to EUR 9.7 million at the end of October, which is sufficient to cover 216% of the money supply (M1) or six months’ worth of the country's imports of goods and services, the NBS reported yesterday.

The bank points out that the reserves increased by EUR 155 million from a month earlier even with early and regular repayment of foreign currency-denominated debt in the total amount of EUR 191.2 million.

Net FX reserves (total reserves less banks’ FX balances on account of required reserves and other requirements) came at EUR 8.08 billion, up by EUR 127 million compared to the previous month.

The growth in FX reserves in both gross and net terms gains particular importance in light of the persistently unfavorable conditions for asset investment in the international financial market, the NBS says.

The largest inflow to FX reserves in the month under review came from NBS interventions in the IFEM, i.e. purchase of EUR 135 million (since July, NBS interventions provided a EUR 640 million boost to FX reserves).

Significant amounts also flowed in from the sale of government foreign currency-denominated securities in the domestic financial market (EUR 71.3 million), grants and the increased FX required reserves of banks (EUR 21.1 million). An inflow of EUR 131.6 million was secured through successful FX reserves management and from other sources, the central bank pointed out.

The above inflows, as the bank explains, more than sufficed to cover the outflows for servicing of liabilities in respect of frozen FX saving deposits and liabilities on other grounds (EUR 204 million).

IFEM trading volumes reached EUR 336.4 million in October, up by EUR 30.2 million from the month before. In the first ten months of 2016, the volume of interbank trading totaled EUR 5.14 million.

In October, the dinar appreciated against the euro by a nominal 0.1%, while the NBS intervened in the IFEM by buying EUR 135 million in order to ease excessive daily volatility of the exchange rate.

Narodna banka Srbije Beograd

NBS

foreign exchange reserves

money supply coverage

interbank foreign exchange market

IFEM

securities

dinar exchange rate