Serbia successfully raised €300mn (RSD35bn) in a primary auction of five-year dinar-denominated government bonds on July 28, drawing robust interest from investors despite a volatile year for domestic debt markets.

The bonds, carrying an annual coupon rate of 4.5%, were sold at a yield to maturity (YTM) of 4.49%, with the total bid volume reaching RSD65.31bn—nearly double the amount on offer, Serbia’s Public Debt Administration announced.

The issuance is part of the government’s broader strategy to raise RSD120bn (€1.02bn) through both euro- and dinar-denominated bonds in 2025 and 2026, as outlined in its fiscal plan published in December 2024. Proceeds will help finance infrastructure and development initiatives, while also supporting Serbia’s widening fiscal deficit.

The bonds, priced at RSD10,004.39 per unit, mature on July 30, 2030. Annual coupon payments are scheduled for every July 30 until maturity.

The strong reception follows a €250mn auction of 12-year euro-denominated Treasury bonds on July 25, which also saw high demand, with bids reaching €385.86mn—more than 50% above the offer.

Investor appetite for Serbian debt appears to be rebounding after a mixed first half of the year. A January auction of long-term dinar bonds recorded a solid 93% realisation rate. However, demand waned in the spring, with just 37% of bonds sold in March and 34% in May.

Analysts say the recent uptick in demand reflects growing confidence in Serbia’s fiscal trajectory, supported by moderate inflation and a stabilising currency outlook. Yet risks remain amid regional uncertainties and domestic political unrest.

The Finance Ministry is expected to continue tapping domestic and international markets in the second half of the year as it seeks to meet its 2025 financing targets.