Serbia’s foreign exchange reserves fell in March, as outflows linked to government debt repayments and central bank interventions outweighed inflows, the National Bank of Serbia (NBS) said on April 9.

Gross foreign exchange reserves stood at €28.48bn at the end of March, down by €1.33bn from a month earlier, the central bank said.

Net foreign exchange reserves, which exclude banks’ required reserves and liabilities to the International Monetary Fund (IMF), declined by €1.31bn to €23.94bn.

The NBS said outflows were driven by net loan repayments and other foreign currency liabilities of the state totalling €443.3mn, as well as its intervention on the domestic foreign exchange market through net sales of €410mn.

Inflows into reserves were modest, amounting to €117.8mn from banks’ reserve requirements and €11.7mn from reserve management, donations and other sources.

Market factors also weighed on reserves, with net negative effects of €608.4mn due primarily to an 11.8% drop in gold prices in dollar terms. This was partly offset by a roughly 3% strengthening of the US dollar against the euro.

Despite the monthly decline, reserves remained at a level deemed adequate by international standards, covering 161.4% of the M1 money supply and 6.6 months of imports of goods and services, more than double the benchmark threshold.

Gold holdings continued to rise, increasing by 326.2 kilograms in March after the central bank purchased 26 gold bars from domestic producer Serbia Zijin Copper. Total gold reserves reached a record 53,737.2 kilograms, valued at €6.94bn, accounting for 24.4% of total reserves.

However, the value of gold reserves fell by €652.5mn during the month due to adverse market movements.

On the domestic foreign exchange market, interbank trading volume rose to €630.9mn in March, up by €95.5mn from February. Since the start of the year, trading volume has totalled €1.63bn.

The dinar remained broadly stable against the euro in March and weakened by 0.1% in nominal terms in the first quarter.

The central bank sold €410mn on the interbank market in March and a total of €1.22bn since the beginning of the year to support the dinar’s exchange rate.