NBS mitigates coronavirus crisis effects with EUR 240 million
At the end of July, the gross foreign exchange reserves of the National Bank of Serbia (NBS) amounted to 13.5 billion euros, which is 800 million euros more than a year ago, the NBS announced today. Foreign exchange reserves at this level provide M1 money supply coverage of 144 percent and six months of the import of goods and services, which is twice the standard. Net foreign exchange reserves (foreign currency reserves reduced by banks’ foreign exchange reserves and other items) amounted to EUR 11.4 billion at the end of July. At the end of July, gross foreign exchange reserves were lower by EUR 435.3 million compared to the end of the previous month, as a result of the settlement of foreign currency liabilities of the state (net amount of EUR 126.3 million), as well as the need for the NBS to take measures on the domestic foreign exchange market to mitigate the effects of the coronavirus crisis on the Serbian economy (total effect based on the net sale of foreign currencies and swap auctions – 240 million euros). In addition, market factors in the net amount of EUR 109.9 million had an effect on the reduction of foreign exchange reserves in July. As stated in the announcement by the NBS, net inflows into foreign exchange reserves during July were realized on the basis of efficient management of foreign exchange reserves, donations, and other items (a total of 40.9 million euros). The volume of realized foreign currency trade on the interbank foreign exchange market in July amounted to EUR 516.6 million and it was EUR 66.2 million lower than in the previous month. In the first seven months of this year, a turnover of a total of 3,952.7 million euros was realized in interbank trade. In July, and since the beginning of this year, the value of the dinar is almost unchanged in relation to the euro. In order to maintain stability on the foreign exchange market, the NBS sold EUR 325 million net on the interbank foreign exchange market in July, and EUR 1,355 million since the beginning of the year.