Serbia’s foreign-currency reserves fell 2 percent in May as the central bank continued to sell euros to bolster the dinar.
Reserves dropped to 10.2 billion euros ($12.8 billion) from 10.4 billion euros in April, largely due to central bank actions on the local currency market which cost 472.7 million euros last month, the Narodna Banka Srbije said in an e-mail today. The reserves were 12.1 billion euros at the end of last year.
The dinar weakened about 12 percent over the first five months of the year before regaining some ground last week. The central bank spent about 1.2 billion euros this year to counter pressures on the currency, amid inconclusive elections on May 6 and efforts to form a government.
The central bank’s net reserves, excluding deposits by commercial lenders and money from the International Monetary Fund, fell to 5.53 billion euros from 5.9 billion euros in April. They equaled 453 percent of M1 money supply, up from 421 percent a month earlier, or more than seven months of the Balkan country’s average imports.
The second-biggest drain in May was a 115.3 million-euro installment to repay Serbia’s debt to citizens whose savings were held in the early 1990’s and which the government compensates through so-called old savings bonds.
Inflows included 91.4 million euros from the sale of euro-denominated government debt, 40.5 million euros from credit lines and donations, and 35.2 million euros from commercial banks, which are adding funds to meet mandatory reserve requirements.
Interbank foreign-currency trading rose in May to 1.1 billion euros from 817 million euros in April, bringing the five-month trading volume to 6.43 billion euros, the central bank said.