Serbia Forex Reserves

Serbia’s forex reserves hit a record high of €16.8 billion


The National Bank of Serbia’s (NBS) foreign exchange (FX) reserves reached the highest level on record at the end of September – EUR 16,802.5 mn, up EUR 1,217.1 mn from end-August.

Such a level of gross FX reserves covers 149% of money supply (M1) and around seven months’ worth of the country’s import of goods and services, which is twice the level prescribed by the standard on the adequate level of coverage of the import of goods and services by FX reserves, the NBS said.

At the same time, net FX reserves (FX reserves less banks’ FX balances on account of required reserves and other requirements) equalled EUR 14,246.0 mn, up by EUR 1,061.3 mn from end-August.

The increase in gross FX reserves in September is primarily attributable to the inflow of euros from two issues of eurobonds in the total amount of EUR 1,707.7 mn. For the first time in its history, Serbia issued a “green” eurobond in the IFEM, in the nominal amount of EUR 1.0 bn (seven-year maturity, at the lowest coupon rate ever of 1.00% and the yield rate of 1.26%), as well as the 15-year conventional eurobond in euros in the nominal amount of EUR 750 mn, meaning that this is the eurobond with the longest maturity ever issued by the Republic of Serbia.

Serbia FX Reserves NBS
(Source: National Bank of Serbia)

In addition to the above-mentioned eurobond sale, net inflows to FX reserves during September were also achieved on account of the NBS’s activities in the local FX market (EUR 165.0 mn net), FX reserves management, donations and other sources (EUR 199.6 mn net total). These inflows were more than sufficient to cover the outflows in respect of net government credit debt repayment and securities (EUR 865.5 mn, of which EUR 619.8 mn was used for the repayment of the remaining portion of the dollar eurobond issued in 2011) and outflows on other grounds (EUR 16.1 mn in total).

Another factor driving FX reserves up in September was the positive effect of market factors in the net amount of EUR 26.4 mn, according to the central bank.

September trading volumes in the IFEM amounted to EUR 577.7 mn, up by EUR 26.6 mn on the month before. In the first nine months of 2021, interbank trading volumes reached a total of EUR 4,702.5 mn.
In September, as in the year so far, the value of the dinar vis-à-vis the euro remained broadly unchanged. The NBS purchased EUR 135.0 mn net in the IFEM during the month. Since the start of the year, the NBS bought EUR 1,100.0 mn net in order to maintain relative stability in the FX market.