Yesterday, Serbian dinar was the strongest against euro since the beginning of this year and the main reasons for this are a growing trust shown by foreign investors and an increase in purchase of T-bonds in dinars – says Jorgovanka Tabakovic, the Governor of the National Bank of Serbia (NBS).
The official median exchange rate currently stands at 121.94 dinars for 1 euro. As the NBS says, in June, dinar appreciated by 0.5% while the appreciation since the beginning of this year stands at 1.1%. Tabakovic underlines that it is impossible to predict the exchange rate, but adds that significant turbulences are not expected this year.
“The fact that the NBS is well-informed about relevant factors makes it possible to effectively maintain stability on the foreign currency market. We expect no major turbulences in the currency market in the following period”, the Governor added.
The Serbian central bank purchased an unspecified amount of euros on Tuesday to weaken the dinar, which rallied on strong demand for the domestic currency and low market liquidity, dealers said.
The bank, which has bought 280 million euros ($312.45 million) so far this year, stepped in as the dinar traded at 121.7 to the euro, dealers said. After the intervention, the dinar weakened to 121.82 to the euro.
The NBS Governor Jorgovanka Tabakovic also said that the dinar rally stemmed from balanced supply and demand on the currency market, an increase of exports, rise of euro-indexed assets of banks and lending.
Societe Generale Bank says that the domestic currency appreciated as a result of positive macro-economic factors.
“Dinar has grown due to the expectations of the end-of-the-year economic growth reaching at least 3% despite the initially slower growth of the national GDP in the Q1 of this year. We expect dinar to remain stable this year, and for the dinar/euro exchange rate to remain as it is”, Dragoslav Velickovic from Societe Generale Bank says.
(Blic, Reuters, 20.06.2017)
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