March 20 (SeeNews) - Serbia's central bank plans to hold an additional three-month forex swap auction on March 23 to supply dinar liquidity to the banking sector at an interest rate of 0.85%, it said.
By buying euro for dinars, the central bank aims to support the domestic financial system and economy amid the spread of the novel coronavirus disease, the central bank, NBS, said in a statement on Thursday.
The decision to hold the additional forex swap auction was adopted as part of the measures imposed by the central bank during the state of emergency introduced by the Serbian government because of the coronavirus crisis, NBS said, stressing that neither dinar nor foreign exchange liquidity of the domestic banking sector are threatened, and that there are ample liquidity buffers to sustain the normal functioning of the financial system.
"Forex swap auctions are a regular instrument the NBS may use to regulate dinar and foreign exchange liquidity of the banking sector. The additional swap auctions organised by the NBS in the first half of 2019 proved exceptionally effective – they contributed to maintaining stability in the money market amid a temporary slump in excess dinar liquidity," the central bank said.