UPDATE 1 - Serbian Dinar Slightly Weakens in Quiet Trading, C-bank Intervention Unlikely - Dealers

BELGRADE (Serbia), October 28 (SeeNews) – The Serbian dinar traded slightly weaker against the euro in low volumes in early Tuesday afternoon despite Monday’s central bank intervention, dealers said.

“The market has been stable today, at 84.50–85.20/30 dinars per euro,” a local dealer told SeeNews around 1230 GMT.

“There has been no central bank intervention today, as this price range is steady, banks trade among themselves in rather small volumes,” he added.

The Serbian central bank, NBS, on Monday intervened by selling 26 million euro ($32 million) to curb the fall in the dinar, which reached a 2008 low of 86.00 per euro.

"I think the central bank will not intervene today as it sold 26 million euro yesterday and couldn’t do anything,” a local dealer told SeeNews earlier on Tuesday. “After the intervention, the dinar rose to 84.00 per euro from 85.00 but it is at 85.00 again today.”

“If they haven’t intervened by now, I don’t know what could make them do so from now on,” the first dealer said.

A third dealer said market volatility has subsided on Tuesday.

Rejecting local media reports, NBS said in a statement on Tuesday there is no critical or psychological exchange rate of the dinar it is safeguarding - neither up, nor down. NBS governor Radovan Jelasic has never mentioned a figure as a limit, the statement said.  

NBS reiterated its stance that the exchange rate is formed by the market and the central bank's interventions aim to prevent excessively wide daily oscillations in the exchange rate and solve problems such as falls in daily trading volumes.

“The central bank is expected to intervene again but I suppose this won’t be today,” the second dealer said.

($=0.8011 euro)