Serbia’s central bank sold euros for the second straight day to slow declines in the dinar after the currency fell to the lowest level in five months amid investor concern over the country’s fiscal slippage.
The Narodna Banka Srbije, based in the capital, Belgrade, sold 30 million euros ($38.8 million) to commercial banks to “ease excessive daily volatility” in the domestic currency, according to a statement on its website.
Three traders in Belgrade, who asked not to be identified in line with their banks’ policies, said the regulator started selling euros at levels of about 112.55 dinars after the currency dropped 0.8 percent on the day during today’s session. The dinar traded at 112.7440 to the euro at 5:30 p.m. in Belgrade, data compiled by Bloomberg show.
The decline comes a week after the International Monetary Fund said Serbia’s budget gap will top 8 percent of gross domestic product, more than double the target, unless government policies change.