Serbian Dinar Weakens Further, Dealers Uncertain if C-bank Will Intervene

“It [the dinar] opened at 86.70 dinars per euro and we are now [1100 GMT] at 87.50 which is some weakening but in a very small volume,” a local dealer told SeeNews, adding that the dinar closed at 86.00-86.50 per euro on Tuesday.

“There has been no central bank intervention. I don’t know whether it will intervene,” he said.

The central bank, NBS, sold 50 million euro ($63 million) on Tuesday to narrow the gap between the buy and sell rates. This firmed the dinar to 86.39 per euro from 87.44 before the NBS stepped in.

“It [the dinar] is at 87.75 dinars per euro at the moment [1200 GMT] after starting at 87.00 in the morning, as at one point it reached 88.00 dinars per euro,” another dealer told SeeNews.

The dinar broke the 88.00 barrier on Tuesday, reaching 88.30, and on Wednesday briefly touched 88.00, he said. “So, we could say it was weaker yesterday compared to today’s morning trade.”

The dealer said NBS may decide not to intervene on Wednesday as market liquidity has increased.

“Yesterday the liquidity was lower and that’s why the oscillation was so big,” he added.

NBS indicative dinar/euro rate of 87.57 on Wednesday puts the local currency in its weakest position since May 17, 2006, when it was 87.84, the first dealer said.

($=0.7916 euro)