Serbia to Sell 34.3 Billion Dinars in Treasuries Next Month

The Serbian government will sell 34.3 billion dinars ($405.7 million) in Treasury bills and bonds next month, the Belgrade-based Debt Management Agency said today.

The government plans to raise 21.3 billion dinars through 53-week and 24-month debt issues, on May 7, 15 and 22 respectively, five billion dinars each in six-month and 18-month bills on May 3 and 9 and will try to borrow another 3 billion dinars in 5-year bonds on May 29.

The total borrowing planned for May is 35 percent less than the amount the government wanted to raise in April, the month before general elections, when weaker demand for longer-dated debt led to faltering debt auctions.

Serbia is heavily reliant on domestic market borrowing to ensure budget liquidity and finance this year’s deficit, seen by the International Monetary Fund at 5.25 percent of gross domestic product, excluding new debt issuance and sovereign guarantees.

The Washington-based lender froze its $1.3 billion precautionary loan program for Serbia in January, after it turned out that the 2012 deficit will exceed the agreed limit of 4.25 percent of GDP.

The new government, which will be formed after the May 6 ballot will need to quickly revise the 2012 budget, cut the gap and limit the new state borrowing to preserve investors’ confidence, the IMF resident representative Bogdan Lissovolik said in a March 30 interview.

The nation is struggling to maintain capital inflows after its January-February current account deficit expanded 47 percent on year, as both portfolio and foreign direct investment declined.

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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