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Serbian dinar gains on high demand for local-currency bonds - c-bank

Author Radomir Ralev
Serbian dinar gains on high demand for local-currency bonds - c-bank Source: Statistical Office of the Republic of Serbia

BELGRADE (Serbia), June 5 (SeeNews) - The Serbian dinar reached its highest level against the euro since September 2014 on Tuesday, as international investors put money into bonds denominated in the local currency, the Serbian central bank said.

The official exchange rate of the dinar against the euro as at June 4 reached 117.9097, the highest value in four and a half years, as foreign investors were buying dinars to purchase Serbian sovereign securities, the central bank, NBS, said in a statement on Tuesday.

In this way, investors proved they are confident that Serbia’s economic development will rest on sustainable grounds in the future, NBS noted.

The dinar's appreciation pressure in the last two years is structural, resulting from better economic indicators, increase in foreign direct investment (FDI), as well as export growth and rising foreign exchange inflow from tourism.

From January 1 to June 3, the central bank has bought 380 million euro ($427.9 million) from local commercial banks and sold 130 million euro, in order to maintain the stability of the forex market. Since April 2017, the central bank has increased its foreign exchange reserves by about 2.9 billion euro through interventions on the forex market.

(1 euro = 118.831 euro)