Serbia forex reserves decline by 6.6%

Serbia’s foreign-currency reserves shrank by 6.6 per cent last month, falling for the fourth month in a row, largely due to capital outflows and a drop in the euro-selling activity at the central bank, which hindered the dinar, reports Bloomberg.

Foreign-exchange reserves dropped to 10.387bn euros ($13.365bn), from March’s figure of 11.07bn euros - the lowest they have been since August last year – revealed the country’s central bank Narodna Banka Srbije in a statement today.

The fall resulted mainly from banks pulling out 469.8m euros following changes in mandatory reserve regulations, according to the central bank. The government repaid its foreign creditors 66.6m euros.

The bank’s net reserves, before taking into account International Monetary Fund loans and deposits by commercial lenders, dropped to 5.9bn euros last month from 6.14bn euros the previous month. They equated to 421 per cent of M1 money supply, falling from 461 per cent in March, enough for over seven months of imports, revealed the bank.

The bank spent 210m euros last month in the foreign-exchange market to slow the dinar’s decline, which dropped 6.5 per cent versus the euro between January and April. The central bank said that 816.6m euros of interbank trading volumes compared with March’s figure of 1.01bn euros, with trading volumes for the opening four months of the year being at 5.34bn euros.