Wednesday December 3, 11:36 AM
Serbia cbank intervenes as dinar hits record-low
BELGRADE, Dec 3 (Reuters) - Serbia's central bank intervened on currency markets again on Wednesday as its faltering dinar currency lost 1 percent against the euro to hit a fresh all-time low against the single currency, dealers said.
'So far we have seen at least five rounds of intervention,' one dealer said. 'The result of their intervention was poor.'
After breaking through the psychologically important 90 level per euro on Tuesday, the dinar continued its fall to trade as low as 92.351 on Wednesday, before gaining back about a dinar against the euro.
'We have no precise figure on the intervention, but we estimate so far it has been between 30 and 50 million euros,' another dealer said.
The currency in the Balkan country is very reliant on foreign exports but with a large trade deficit has been down as much as 22 percent since its height in August.
Although the governor of the central bank said last week he expects the dinar to gain strength eventually, some experts see stability only coming at around 100 dinars to the euro.
'In the times of political instability, ahead of the May elections, monetary policy was such to increase the value of the dinar to finance imports,' said Vladimr Gligorov, an economist with the Institute for International Economic Studies in Vienna.
'Now the dinar is 90 and it will be 100, that's the price that will have to be paid for past monetary policy.'
The Serbian central bank has intervened regularly in recent months and spent 646 million euros since the beginning of October through Tuesday in an effort to prop up the currency and maintain liquidity.
(Reporting by Adam Tanner and Ivana Sekularac; Editing by Patrick Graham) Keywords: SERBIA DINAR/
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
