Thanks to the fact that the state has recently been borrowing in euros and deleveraging in dollars, after 15 years, Serbia is no longer on the list of risk premiums of EMBI debtors of JP Morgan Bank (JP Morgan).
The National Bank of Serbia (NBS) announced today that, thanks to the responsible policy of the state towards public debt, the American financial institution JP Morgan no longer publishes the indicator of the risk premium for Serbia based on the dollar.
The EMBI (Emerging Markets Bond Index) risk indicator for Serbia, based on US dollar debt, has ceased to be published since the last day of August, the statement said.
The reason is that there are less than 13 months left until the maturity of the only dollar Eurobond that Serbia has left to pay to investors, so according to the bank’s criteria, that bond is excluded from the calculation.
Serbia, as it is stated, thanks to favorable monetary and fiscal developments and successful entry into the international financial market, in previous years prematurely bought a significant part of the previously expensive debt on the basis of dollar Eurobonds.
“This expensive and foreign exchange-risk debt has been replaced by significantly cheaper financing in euros – thus reducing the share of the dollar in public debt, and thus the country’s exposure to the foreign exchange risk of the dollar against the euro,” the NBS states.
After Serbia’s successful entry into the international financial market with the first issue of Eurobonds in euros in June 2019, benchmark data on the EMBI risk premium for Serbia “on the basis of debt in euros” became available.
“Since the end of July 2019 – since the data became available – this indicator has been on average 10 basis points lower than the general (composite) indicator of the global risk premium of developing countries, which confirms that international investors consider Serbia a safe and favorable investment destination,” it is written in the announcement, Mondo reports.
