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FX Swaps and Repo Purchase of Securities – NBS Provides Additional Dinar and FX Liquidity to Banks

At today’s regular three-month FX swap auctions, the NBS swap sold EUR 56 mn (in exchange for RSD 6.6 bn) and swap bought EUR 25 mn (in exchange for RSD 2.9 bn) at fixed swap points instead of the variable multiple swap points as has been the case so far. By changing the realization principle, under which the realized volumes of swap purchase and sale no longer have to be identical, the NBS is enabling banks to obtain the necessary amount of dinar and FX liquidity at favourable interest rates – 0.85% for dinar and 0% for euro funds.

In addition to the regular three-month FX swap auctions, the NBS held today an auction of repo purchase of dinar government securities, thereby supplying banks with RSD 1.0 bn for a period of seven days, at a favourable interest rate of 0.75%, which is equal to the deposit facility rate (the lowest rate in the NBS interest rate corridor).

By holding FX swap and repo auctions today, the NBS continued providing support to the domestic financial and overall economic system in the current emergency state declared by the Republic of Serbia amid the spread of COVID-19.

As so far, the NBS will keep a close eye on banking sector liquidity and movements in the financial market, ready to use, if necessary, all available instruments in order to ensure smooth functioning of the domestic money market and the financial system at large.

Governor’s Office