End-August NBS gross FX reserves at 23.6 bln euros

BELGRADE - National Bank of Serbia (NBS) FX reserves totalled 23,623.7 mln euros at end-August, reaching their highest end-of-month level since records began in 2000, the central bank said on Tuesday.

In August, gross FX reserves rose by 489.5 mln euros compared to the previous month.

"They covered 183.9 pct of money supply M1 and 6.3 months’ worth of the country’s imports of goods and services, which is more than twice the level prescribed by the adequacy standard.

Net FX reserves (gross FX reserves less banks’ FX balances on account of required reserves, liabilities to the IMF under SBA, and other grounds) also touched their all-time end-of-month high – 19,476.0 mln EUR, having increased by 543.9 mln EUR from July," an NBS statement said.

"The August increase in gross FX reserves reflects primarily net FX purchase of the NBS in the local FX market (inflow of 315.0 mln EUR) and credit disbursement by the Republic of Serbia in the net amount of 204.2 mln EUR. Inflows also came from FX reserves management, grants, and other sources (67.0 mln EUR in total).

These inflows were more than sufficient to cover the outflows on account of a withdrawal of banks’ FX required reserves, as well as the settlement of government FX liabilities and payments on other grounds (155.2 mln EUR in total).

In August, FX reserves benefited also from the positive effect of market factors in the net amount of 58.5 mln EUR, largely a result of the strengthening of the US dollar against the euro by around 0.8 pct, while the drop in gold prices by around 1.4 pct in the international market worked in the opposite direction.

Trading volumes in the IFEM amounted to 602 mln EUR in August, up by 46.3 mln EUR from the month before. In the eight months of 2023, IFEM trading volumes totalled 5,186.1 mln EUR," it also said.