FX Reserves and IFEM Movements in April
NBS FX reserves stood at EUR 10,429.3 mn at end-April, up by EUR 194.4 mn from end-March, ensuring the coverage of 189% of money supply (M1) or more than five months’ worth of the country’s imports of goods and services (almost twice the level prescribed by the standard on the adequate level of coverage of the imports of goods and services by FX reserves).
Net FX reserves (total reserves less banks’ FX balances on account of required reserves and other requirements) came at EUR 8,625 mn at end-April, up by EUR 165 mn from end-March.
It is important to note that FX reserves rose in an environment of the government’s early debt repayment to London Club creditors (outflow of EUR 130.9 mn) and net debt repayment in respect of FX securities issued in the domestic financial market (outflow of EUR 24.4 mn). The main factor contributing to the increase was the inflow from NBS interventions in the domestic FX market (purchase of EUR 215.0 mn). A boost also came from net inflows on account of FX loans, donations, FX reserve management and other grounds (EUR 75.1 mn in total), while a positive net impact of market factors was also recorded (EUR 59.6 mn), most notably changes in cross-currency trends in the international financial market.
Trading volumes in the IFEM amounted to EUR 472.3 mn in April, down by EUR 370.5 mn from the month before. In the first four months of 2018, interbank trading volumes reached EUR 2,748.9 mn.
In April, the dinar appreciated against the euro by 0.2% in nominal terms, and the NBS intervened in the IFEM by purchasing EUR 205 mn in order to ease excessive short-term volatility of the exchange rate.