FX Reserves and IFEM Movements in February
NBS FX reserves stood at EUR 9,759.4 mln at end-February, which is sufficient to cover as much as 210% of the money supply (M1) or six months’ worth of the country’s imports of goods and services (double the amount envisaged by the standard defining an adequate level of FX reserves).
Down by EUR 76.0 mln from the month before, net FX reserves (total reserves less banks’ FX balances on account of required reserves and other requirements) came at EUR 8,046.0 mln at end-February. Gross FX reserves fell by EUR 94.9 mln.
The inflows from FX securities (sales exceeding redemptions), FX reserves management (despite the persistently unfavourable environment for investment in the international financial market) and other inflows – in the total amount of EUR 140.1 mln – compensated for the outflows in respect of NBS interventions in the IFEM (EUR 105.0 mln) and outflows from the accounts of banks’ FX required reserves (EUR 36.6 mln). Therefore, the February decrease in FX reserves was driven mainly by loan repayments exceeding loan disbursements (EUR 92.0 mln).
Trading volumes in the IFEM amounted to EUR 311.6 mln in February, down by EUR 61.3 mln from the month before. In the first two months of 2017, interbank trading volumes reached EUR 684.4 mln.
At end-February, the dinar remained broadly unchanged vis-à-vis the euro relative to end-January. In February, the NBS intervened in the IFEM by selling EUR 105 mln in order to ease excessive short-term volatility of the exchange rate.