Feb. 7 (Bloomberg) -- Serbia’s government cut its foreign-exchange deposits with the National Bank of Serbia by 43 billion dinars ($527 million) in December, the biggest monthly drop in three years, according to the central bank.
The decline was the biggest since December 2008, when the Balkan country felt the worst pinch of the crisis caused by the collapse of Lehman Brothers Holdings Inc., which at the time triggered a 1 billion-euro outflow from Serbian banks.
The government tapped the assets it holds with the Belgrade-based Narodna Banka Srbije after deciding to stop selling new debt that month to avoid breaching the public-debt limit of 45 percent gross domestic product.
Its foreign-currency deposits, calculated in dinars, dropped to 99.49 billion dinars at the end of 2011. Total deposits, which also include dinar assets, dropped to 156.4 billion dinars from 196.47 billion dinars in November.
Foreign-currency deposits peaked at 209.49 billion dinars in September,t rising by 82.4 billion dinars after Serbia sold a $1 billion debut, 10-year Eurobond with a 7.25 percent coupon.
Dinar reserves money expanded by 35 billion dinars in December to 227 billion dinars. Cash in circulation rose by 12 billion dinars to an all-time high of 114 billion dinars, according to the bank’s website.
Serbia has still not issued an end-December budget report to show the full-year fiscal gap for 2011. No one at the Finance Ministry responded to e-mailed questions.
The January-November gap of 119.97 billion dinars left the government room to end December with a monthly deficit of 22.7 billion dinars and still meet a full-year 142.7 billion-dinar cap set in its revised 2011 budget.
The IMF is looking at the budget performance in December for government talks that focus on finding ways to curb Serbia’s excessive borrowing plans and keep the budget gap within 4.25 percent of GDP in 2012, as agreed to under a $1.3 billion precautionary loan program.
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