NBS FX reserves highest on record

BELGRADE - Increasing by 282.9 mln euros from a month earlier, National Bank of Serbia (NBS) gross FX reserves reached 21,196.2 mln euros at end-February, their highest end-of-month level since records began in 2000.

"They covered 173 pct of money supply M1 and 5.6 months’ worth of the country’s import of goods and services, which is almost twice the level prescribed by the adequacy standard," the NBS said in a statement.

"Net FX reserves (FX reserves less banks’ FX balances on account of required reserves, liabilities to the IMF under SBA, and other grounds) touched their all-time end-of-month high – 17,296.1 mln euros, having increased by 327.2 mln euros from end-January.

The February increase in gross FX reserves reflects primarily NBS interventions in the local FX market on the purchase side (inflow of 285.0 mln euros), as well as grants - 154.4 mln euros, including 148.5 mln euros relating to the European Commission’s grant for budget support to the energy sector in 2023. Net inflows also came from FX reserves management and other sources (32.7 mln euros in total).

These inflows were more than sufficient to cover the outflows from FX reserves driven by government net debt repayment in respect of FX loans (80.8 mln euros), settlement of other government liabilities (71.6 mln euros in total), and net withdrawal within regular FX reserve requirement activity of banks (36.7 mln euros).

The market effects (cross-currency changes, a change in prices of gold and securities in the international financial market) were negative in the amount of 0.2 mln euros net.

Trading volumes in the IFEM amounted to 535.4 mln euros in February, down by 176.3 mln euros from the month before. In the two months of 2023, IFEM trading volumes totalled 1,247.2 mln euros," the NBS also said.