June 21 (SeeNews) - Serbia's government has significantly reduced exposure to FX risk through the issue of 1 billion euro ($1.1 billion) of ten-year Treasury notes on the international capital market on June 19, central bank governor Jorgovanka Tabakovic said.
"The old expensive debt was replaced with much cheaper funding, while at the same time Serbia’s exposure to FX risk declined significantly owing to the reduction of the portion of public debt in US dollars," Tabakovic said on Thursday, as quoted in a statement by the central bank.
Through the issue, to be listed on the London Stock Exchange (LSE), Serbia saved over 3.8 billion dinars ($36 million/32 million euro) in interest payments alone on two issues of US dollar-denominated notes, placed in 2011 and 2013 and maturing in 2020 and 2021, respectively, the finance ministry said on Thursday.
The notes were issued at a coupon rate of 1.50% and a rate of return of 1.619%, this being the best financial conditions that Serbia has ever achieved in the international market, while the demand exceeded the offer by 6.4 times, the central bank said.
A total of 300 investors from all over the world showed interest in the issue, finance minister Sinisa Mali said on Thursday.
Serbia's budget was in surplus of 32.2 billion dinars in 2018, compared to a surplus of 33.9 billion dinars in the previous year. In the first four months of 2019, the country recorded a budget surplus of 5.5 billion dinars.
($ = 0.8844 euro)