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Serbia’s Foreign-Exchange Reserves Drop in June on Dinar Defense

July 11 (Bloomberg) -- Serbia’s foreign-exchange reserves fell 0.1 percent in June as the National Bank of Serbia spent euros to bolster the dinar and the government repaid debt.

Reserves declined to 10.16 billion euros ($12.5 billion) in June from 10.17 billion in May and 12.1 billion euros at the end of 2011, the Belgrade-based Narodna Banka Srbije said in an e-mail today.

Its net reserves, excluding deposits by commercial lenders and money from the International Monetary Fund, dropped to 5.42 billion euros from 5.53 billion in May, it said.

The bank’s defense of the dinar, which according to data compiled by Bloomberg gained 1.5 percent against the euro in June, cost 107.6 million euros, down from 472.7 million euros in May.

The government repaid 75.2 million euros to domestic creditors and 60.1 million euros to foreign lenders. Inflows included 61.7 million euros of credits and donations, the government’s euro-denominated borrowing of 140 million euros in the local market, while banks added 166.6 million euros to meet new, tightened reserve requirement rules.

Total reserves equalled 438 percent of M1 money supply, down from 453 percent in the previous month.

Interbank foreign-currency trading rose in June to 1.82 billion euros from 1.1 billion euros in May, bringing the six-month volume to 8.25 billion euros, the bank said.

To contact the reporters 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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