Serbia’s foreign exchange reserves reached a record of 14.3 billion euros at the end of May

, News

The gross foreign exchange of the National Bank of Serbia (NBS) at the end of May 2020 amounted to about 14.3 billion euros and was at the new highest level at the end of the month since 2000, when data were monitored in this way, as well as net foreign exchange reserves of about 12.2 billion euros, the NBS announced today.
As stated, the gross foreign exchange reserves were higher by about 1.6 billion euros than in April and de-energized the coverage of the money supply M1 of 159 percent and six months of imports of goods and services, which is twice as much as the standard.
Net foreign exchange reserves (foreign exchange reserves reduced by banks’ foreign exchange assets on the basis of required reserves and other bases) at the end of May increased by 1.5 billion euros compared to the previous month.
The increase in gross foreign exchange reserves is the result of the inflow based on the issuance of Eurobonds of the Republic of Serbia on the international financial market in the nominal amount of two billion euros, primarily to provide funds for economic measures to mitigate the negative consequences of the COVID-19 pandemic.
As the central bank pointed out, net inflows into foreign exchange reserves were also realized on the basis of efficient management of foreign exchange reserves, donations, foreign exchange required reserves due to the usual activities of banks and other bases (a total of about two billion euros).
It is added that these inflows “exceeded the outflows based on the activities of the National Bank of Serbia on the domestic foreign exchange market (total net effect based on foreign exchange sales and swap auctions – 283 million euros), net government debt relief based on loans (EUR 36.6 million) , and outflows on other bases (87.7 million euros), and fully amortized the negative impact of market factors (total net 92.6 million euros).”
The volume of realized foreign exchange trade on the interbank foreign exchange market in May amounted to 450.8 million euros and was 73.9 million euros lower than in the previous month. In the first five months of this year, a total of around 2.9 billion euros was realized in interbank trade.
In May, as well as since the beginning of this year, the value of the dinar is almost unchanged against the euro, while the NBS sold 250 million euros net on the interbank foreign exchange market in May, and 875 million euros in the first five months of this year, domestic foreign exchange market, especially significant in an environment of heightened uncertainty due to the crisis caused by the COVID-19 virus pandemic, the central bank said in a statement, Novi Magazin reported.