Bosnia’s central bank gross foreign reserves rose 3.2% y/y to BAM 6.37bn (EUR 3.3bn) at end-February 2013, comprising 24.3% of the forecast GDP, central bank data showed. The FX reserves’ growth rate was faster than the 0.5% y/y increase recorded in January, signalling a potential improvement in Bosnia’s external position. In monthly terms, gross foreign reserves edged up 0.8% m/m in February compared with a 2.8% contraction the month before.
Investment in foreign securities increased by BAM 2bn in annual terms to BAM 4.3bn (up 82% y/y) but inched down 0.7% m/m at end-February. Deposits with non-resident banks, however, shrank 50% y/y and 4.0% m/m to BAM 1.8bn. Such deposits have been declining in annual terms since May 2012.
The net foreign reserves held by the central bank grew 3.2% y/y and 0.8% m/m to BAM 6.38bn over the period. The c-bank’s net FX reserves fully cover its monetary liabilities which include cash in circulation as well as reserve deposits of commercial banks and other demand deposits with the central bank. Such a position guarantees the stability of the currency board arrangement. The level of this coverage stood at 108.5% at end-February, slightly down from 109% the year before.
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