The Serbian government deposits held at the central bank (NBS) shrank 3% m/m to RSD 175bn (EUR 1.52bn) at end-June, for a fourth straight month, after contracting 13% m/m in May, central bank data showed. Subdued current spending prior to the 2013 budget rebalance endorsed in early July resulted in a record low budget deficit of RSD 4mn in June and likely helped curb the monthly decline.
However, the negative trend will likely sustain in the coming months, as investor appetite for Serbia’s government securities remains weak reflecting both internal and external factors. In July, the country borrowed the equivalent of EUR 144mn on the local market, just 58.8% of the monthly plan.
In annual terms, state deposits climbed 75% y/y lifted by Serbia’s three Eurobond issues since September 2012 worth a combined USD 3.3bn. The government deposits at the NBS equalled 4.6% of the full-year projected GDP at end-June, down from 4.7% of GDP the month before but up from 3.0% of GDP a year earlier, according to IntelliNews calculations.
Foreign currency deposits calculated in dinars reached RSD 104bn at end-June, down 6% m/m but up 90% y/y. They accounted for 60% in total state deposits. June’s dinar state deposits rose 56% y/y and 1.7% m/m to RSD 70bn.
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