National Bank of Serbia FX reserves amounted to EUR 10,312.7 million at end-February, covering M1 by 311% and around seven months of imports of goods and services.
NBS interventions in the IFEM (purchase of EUR 140.0 million), aimed at smoothing excessive daily exchange rate volatility, were the major inflow channel to FX reserves in February. In addition, significant inflows came from the sale of euro-denominated government securities in the domestic financial market (EUR 92.8 million) and allocation of required reserves of banks (EUR 79.1 million net).
A notable outflow was registered on account of settlement of the country’s liabilities towards foreign creditors (EUR 84.2 million).
Net FX reserves, defined as FX reserves less banks’ required reserves in foreign currency and drawings from the IMF under the arrangement concluded in 2009, came at EUR 8,094.0 million at end-February.
Trading volumes in the IFEM reached EUR 988.6 million, up by EUR 267 million from the month before. In the first two months of 2015, interbank trading volumes totalled EUR 1,710.3 million.
In February, the dinar appreciated against the euro by 2.7% nominally, while the NBS intervened in the IFEM by buying EUR 140 million in order to smooth excessive daily exchange rate volatility.
Implementation of the economic programme supported by the stand-by arrangement concluded by the Republic of Serbia with the IMF on 23 February 2015 will positively impact the movements in FX reserves.
Although Serbia does not intend to make purchases under the arrangement approved at the annual commitment fee of EUR 0.9 million, the positive signal sent to foreign investors should bring about positive effects on FX reserves.
Source; Governor’s Office National Bank of Serbia
