NBS Reminds Exchange Offices: Euro Rate Can Vary 1.25%

The National Bank of Serbia (NBS) said on its website on October 14 that the currency exchange market is stable and well supplied with euros. At the same time, the central bank reminded authorized exchange offices that the euro rate on their lists must stay within a set range around the official middle rate.

In its statement, NBS says it monitors developments on the foreign exchange market every day, along with data on purchases and sales of foreign cash at authorized exchange offices. It adds that it has suitable mechanisms to respond to any disruptions on the market. The statement says the “exchange market in Serbia is stable and well supplied with euros.”

How much can a euro cost at an exchange office today?

Under the Decision on the Conditions and Manner of Conducting Currency Exchange Operations, the buying and selling euro rates on an exchange office’s rate list must fall within plus or minus 1.25% of the official NBS middle rate. On October 14 that rate is 117.3892 dinars per euro, a negligible change from Tuesday.

By our calculation from that rate and the permitted range, an exchange office may buy euros at no less than about 115.92 dinars today and sell them at no more than about 118.86 dinars. A rate on the list outside that range does not comply with the decision.

The dinar is unchanged against the euro from a month ago, 0.2% weaker year on year and 0.1% weaker since the start of the year. Against the dollar it has strengthened 0.3%, and the official middle rate for the US currency is 104.7463 dinars.

What does NBS say about monitoring the rate?

The central bank says it will keep supervising exchange offices. In its statement it says:

“In the period ahead, within its remit, NBS will continue to monitor developments on the foreign exchange market and, within its legal powers, to oversee how exchange rates are set and applied at exchange offices, in order to protect citizens and financial stability.”

The statement does not give a reason for issuing it, does not say how many inspections were carried out and does not mention any fines.

What is known about foreign exchange reserves?

The statement follows published data on foreign exchange reserves for September. Gross reserves stood at 29,859.2 million euros, or 946.2 million less than in August. The published data cite outflows on government foreign currency obligations of 400.2 million euros and net NBS sales of foreign currency on the market of 230.0 million euros as the causes of the decline.