The National Bank of Serbia (NBS) reported that its gross foreign exchange reserves at the end of February 2025 stood at 28.79 billion euros, which is a decrease of 225.3 million euros compared to the end of January. Despite this decline, the level of foreign exchange reserves still provides substantial coverage for the money supply M1, at 180.8 percent, and can cover 7.2 months of imports of goods and services. This level of reserves is more than twice the recommended threshold for covering imports with foreign currency reserves.
Net foreign exchange reserves, which are calculated by subtracting the foreign currency assets of banks (based on mandatory reserves) and obligations to the International Monetary Fund (IMF), stood at 24.3 billion euros at the end of February. This represents a reduction of 274.1 million euros compared to January.
The decline in foreign exchange reserves is mainly attributed to two factors: outflows from the NBS’s interventions on the domestic foreign exchange market, amounting to 325 million euros, aimed at maintaining the relative stability of the dinar against the euro amid seasonal fluctuations in foreign exchange demand. Additionally, there was a net reduction of 145.7 million euros in the state’s foreign currency liabilities, such as foreign loans and other obligations.
However, there were positive inflows into foreign exchange reserves in February, with 69.2 million euros from the allocation of mandatory foreign exchange reserves of banks and 54.2 million euros from reserve management, donations, and other sources.
The NBS highlighted that the net positive effect of market factors in February amounted to 122 million euros, largely due to international market movements. Specifically, the price of gold increased by approximately 0.8 percent in US dollars, and the prices of foreign securities in the NBS portfolio also rose.
In February, the volume of foreign exchange transactions on the interbank market reached 819.1 million euros, which was 159.9 million euros higher than the previous month. In total, 1.4 billion euros in interbank transactions were realized during the first two months of the year.
In terms of exchange rate movements, the dinar weakened nominally by 0.1 percent against the euro in February and since the start of the year. The NBS net sold 325 million euros on the interbank market in February and has sold a total of 745 million euros since the beginning of 2025 in order to maintain the relative stability of the dinar against the euro.
