Serbia's C-bank Intervenes After Dinar Gains 3.0% vs Euro

NBS bought 6.0 million euro ($8.1 million) at the rate of 86 dinars per euro during Monday's afternoon trading, an official from the bank's press office told SeeNews over the phone. The central bank set an indicative rate of 86.1771 dinars per euro after the intervention, it said in a statement.

Earlier in the day dealers told SeeNews that, initially, the dinar kept weakening until around 1200 GMT, reaching more than 88.00 per euro. One dealer said the dinar closed at 87.5 per euro on Friday.

“Then, just as the dinar started firming - probably because the banks decided to start buying [dinars] at that level to fulfil their reserve requirements - the bank stepped in and bought euro," local dealer told SeeNews.

Earlier this month NBS said it would double to 40% the share of mandatory reserves on foreign currency deposits that commercial banks have to maintain in dinars - a move aimed at lending support to the dinar that has been losing ground since the summer.

Prior to the NBS announcement on the new mandatory reserves regulation, the dinar had lost around 10% of its value against the euro in November, the biggest monthly drop compared to the currencies of neighbouring emerging markets.

Last week, NBS bought 7.0 million euro and sold 62 million euro to prop up the local currency.

($=0.7398 euro)