FX Swap Auctions – NBS Introduces Changes to Support Dinar and FX Liquidity of the Domestic Financial System
With a view to providing continuous support to the liquidity of the domestic financial system and economy amid the spread of COVID-19, as of Tuesday, 31 March, the NBS will organise regular FX swap auctions (three-month and two-week maturity) at fixed swap points, and not at variable multiple swap points as has been the case so far.
Furthermore, the realization principle in FX swap auctions will also be changed, so that the volumes of swap purchase and swap sale will no longer have to be identical.
In this way, the role of the NBS in FX swap auctions in the future will not be exclusively that of an intermediary, but also of a supplier of sufficient dinar, as well as FX liquidity, to banks at favourable interest rates.
The following interest rates will be used to calculate fixed swap points in FX swap auctions:
• for dinars: 0.85%
• for euros: 0%.
The above changes in the implementation of regular FX swap auctions (EUR/RSD) were adopted as part of the package of NBS measures aimed at making it easier for banks to manage their dinar and FX liquidity on a continuous basis during the emergency state declared in the Republic of Serbia amid the spread of COVID-19.