The outlook for the Serbian dinar is improving and the currency is likely to continue appreciating against the euro, Societe Generale said.
“The coalition government has been delivering a tough policy message since being sworn-in in July, which has been well received,” SocGen analyst Guillaume Salomon wrote in a note to clients today, issuing a “sell” recommendation at 114.00 dinars to the euro. Salomon set a target of 108.00 to the euro and a stop-loss level of 117.20.
The currency traded at 113.9854 at 4:59 p.m. in Belgrade, rising above 114 for the first time since mid-May, according to data compiled by Bloomberg.
Central bank Vice-Governor Veselin Pjescic said today the dinar has stabilized since June because of increases in interest rates, changes to reserve requirement rules to drain dinar liquidity and renewed lending subsidies for liquidity-stricken companies.