Last year, the National Bank of Serbia (NBS) made a record net purchase of 9 billion euros on the interbank market to maintain the stability of the Serbian dinar, according to a report by Nova ekonomija. This effort contributed to the stability of the exchange rate and the growth of foreign exchange reserves, maintaining the domestic financial system’s resilience, the NBS stated in its 2023 report.
In October 2023, Serbia issued its first eight-year state dinar bond, which saw unprecedented investor demand and has been included in the JP Morgan bond index as of February 2024.
The risk premium on Serbia’s euro and dollar-denominated debt decreased in 2023, reflecting reduced global uncertainty and favorable domestic macroeconomic conditions. All three major rating agencies upheld Serbia’s credit rating, with Standard & Poor’s upgrading Serbia’s outlook from stable to positive.
Foreign direct investment reached a new record of 4.5 billion euros (4.2 billion euros net) for the second consecutive year, with expectations that this inflow will continue to cover the current account deficit, as it has over the past nine years.
By the end of December 2023, the NBS’s foreign exchange reserves had increased by 5.5 billion euros, reaching a gross total of 24.9 billion euros and a net total of 20.8 billion euros. Since 2018, reserves have grown cumulatively by 2.5 times.
The macroprudential stress tests for late 2023 confirmed that the Serbian banking sector remains resilient, well-capitalized, and highly liquid even under significant shocks.
Domestic credit growth slowed in 2023 due to higher loan interest rates, tighter monetary policies from both the European Central Bank and NBS, stricter credit standards, and the high base effect from the previous year. Despite these factors, total domestic loans, adjusted for exchange rate effects, increased by one percentage point compared to the previous year.
