The Serbian dinar weakened to a record low against the euro, the biggest drop in three months, after voters ousted President Boris Tadic in yesterday’s runoff election.
The dinar depreciated as much as 1 percent to 114.4861 per euro and traded 0.7 percent lower at 114.1976 by 4:56 p.m. in Belgrade, the biggest slump on a closing basis since Feb. 24. The BELEX15 index of shares fell 1.3 percent to 469.30, the steepest decline since April 17.
Tadic, who secured the Balkan nation’s candidacy to join the European Union, lost to Tomislav Nikolic, who advocated closer economic ties with Russia, according to results from the Electoral Committee. Nikolic’s victory may unnerve investors with his “more nationalist” tone, Timothy Ash, head of emerging-market research at Royal Bank of Scotland Group Plc in London, said in a note to clients.
“The election of opposition rightist leader Nikolic against incumbent president Tadic generates uncertainties regarding the county’s political stability and economic policies,” Benoit Anne, London-based global head of emerging-market research at Societe Generale SA, and colleagues wrote in a research report today. The election outcome is “not supportive” for the dinar in the short term, Anne said.