FX Reserves and IFEM Movements in June
NBS FX reserves stood at EUR 11,104.3 mn at end-June, up by EUR 221.1 mn from end-May. This level of FX reserves covered 195% 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). Relative to end-June last year, gross FX reserves were up by EUR 1,434.1 mn.
Net FX reserves (FX reserves less banks’ FX balances on account of required reserves and other requirements) came at EUR 9,317 mn at end-June, up by EUR 241 mn from end-May, which is their new highest end-of-month value since 2000.
The June increase in gross FX reserves is attributable chiefly to the inflows from NBS interventions in the domestic FX market (purchase of EUR 320.0 mn from banks). An additional boost to reserves came from net inflows in respect of donations, FX reserves management and other grounds (EUR 76.7 mn total). The said inflows were more than sufficient to compensate for the outflows prompted by net government repayment of FX loans and securities (EUR 97.3 mn) and withdrawal of FX required reserves within banks’ regular activities (EUR 47.1 mn net), and to fully offset the negative influence of market factors (EUR 31.2 mn net) which marked June.
Trading volumes in the IFEM amounted to EUR 450.5 mn in June, down by EUR 63.4 mn from the month before. In the first six months of 2018, interbank trading volumes reached EUR 3,713.2 mn.
In June, the dinar appreciated against the euro by 0.1% in nominal terms, and the NBS intervened in the IFEM by purchasing EUR 365 mn in order to ease excessive daily volatility of the exchange rate.