FX reserve management

Dinar stability reflected in Serbia’s FX reserve operations and policy credibility

Serbia’s exchange-rate stability is supported by the National Bank of Serbia’s management of foreign-exchange reserves. The stable dinar is described as an important macroeconomic anchor, with effects on imported inflation, household confidence, business currency risk and monetary-policy credibility. Exchange-rate stability is also presented as requiring active management, strong reserves and, at times, direct central-bank intervention. February balance-of-payments data in MAT show reserve movements tied to these interventions. Foreign-exchange reserves declined by €88.0mn, mainly because the National Bank of Serbia sold…