FX Reserves and IFEM Movements in September
NBS FX reserves stood at EUR 11,172.5 mn at end-September, down by EUR 153.2 mn from end-August. This level of FX reserves covered 191% of money supply (M1) or around six 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 (FX reserves less banks’ FX balances on account of required reserves and other requirements) came at EUR 9,319 mn at end-September, down by EUR 144 mn from end-August.
The September reduction in FX reserves fully reflects the government’s effort – in an environment of solid fiscal results – to scale down its FX liabilities (EUR 193.7 mn net) on account of loans and securities, which contributes to a further reduction in public debt and improvement of its currency structure.
A boost to FX reserves came from net inflows from donations, FX reserves management and other grounds (EUR 69.5 mn). Market factors were also a positive contributor (EUR 8.7 mn). These inflows more than double the outflows from FX required reserves in respect of banks’ customary activities and other grounds (EUR 37.7 mn net).
Trading volumes in the IFEM amounted to EUR 488.8 mn in September, up by EUR 5.5 mn from the month before. In the first nine months of 2018, interbank trading volumes reached EUR 5,147.2 mn.
In September, the dinar lost 0.1% against the euro in nominal terms. To ease excessive daily volatility of the exchange rate, the NBS intervened in the IFEM by buying EUR 10 mn and selling EUR 15 mn.