Serbia's Foreign Exchange Reserves Hit Record 30.5 Billion Euros

Serbia's gross foreign exchange reserves hit a record high of approximately 30.5 billion euros at the end of July, marking a significant increase from the previous month. The National Bank of Serbia (NBS) reported that this substantial reserve level provides robust coverage for the country's money supply (M1) and exceeds seven months of import cover for goods and services. This figure comfortably surpasses the adequacy standard for import coverage. Net foreign exchange reserves also reached a record 25.99 billion euros by the end of July, an increase of 930.6 million euros from June. The primary drivers for this growth include the NBS's net foreign exchange purchases on the domestic market, totaling 570 million euros in July. Additionally, the sale of government securities on the international financial market contributed 488.3 million euros, alongside other reserve management activities, donations, and miscellaneous inflows amounting to 138 million euros. These inflows were more than sufficient to offset outflows, which primarily consisted of state foreign currency obligations totaling 155.2 million euros. Market effects, influenced by global currency and asset price fluctuations, resulted in a net negative impact of 148.1 million euros, primarily due to the U.S. dollar weakening against the euro and a slight decrease in the price of foreign securities, partially offset by a marginal increase in gold prices.