Serbian Central Bank Sells Euros to Support Dinar

Serbia’s central bank sold 40 million euros ($53 million), adding liquidity to the market and keeping the dinar from weakening further.

The Belgrade-based Narodna Banka Srbije said it was acting against dinar volatility even though the currency fell less than 0.1 percent on the day, according to data compiled by Bloomberg. The National Bank of Serbia has spent 365.5 million euros since the start of 2012 to prop up the dinar.

Serbia holds parliamentary elections on May 6 and President Boris Tadic said on March 2 after a meeting with the central bank governor and the prime minister that they assured him the dinar would stabilize.

The National Bank of Serbia pursues inflation targeting as its monetary policy framework, relying on interest rates as key policy instrument along with a floating exchange rate.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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