October 20, 2008 / 9:32 AM / 9 years ago

RPT-FACTBOX-Key facts about Serbia's economy

(Repeats story first published on Friday)

Oct 17 (Reuters) - Serbia’s central bank has intervened more frequently in the currency market this month to support the dinar currency and senior officials have said the government has decided to ask the International Monetary Fund for a new deal. Following are key facts about why Serbia is seeking support to protect its economy from the global financial crisis.


* Investor worries about whether Serbia would opt for a nationalist or pro-EU government drove the dinar to its lowest so far this year, at 83.8674/euro, shortly before the May election. * The election of a pro-Western government, followed by the July arrest of former Bosnian Serb President Radovan Karadzic and his handover to the Hague war crimes tribunal, reassured investors of Serbia’s commitment to complete cooperation with the tribunal, the key obstacle to speedier EU accession, sending the dinar to its record high of 75.75/euro.

* The dinar was trading at around 82.3/euro on Oct. 17, down around four percent so far this year, as the global financial crisis heightens investor awareness of emerging market risks.


* Serbia runs a managed float regime for the dinar, also called a “dirty float” where central bank intervention is generally against big daily exchange rate swings.

* The dinar is “semi-convertible” as the government still keeps some capital account restrictions for individuals, but allows Serbian companies to invest abroad.


* The current account surged in January-August this year to $6.16 billion or 18.5 percent of GDP from 16 percent in 2007.

* Serbia’s 2007 GDP was estimated at $41 billion and was expected to rise to $50.2 billion this year.

* The IMF has advised Serbia to cut the current account deficit to below 10 percent of GDP in the medium term.

* The current account gap is driven by the trade deficit, which hit $7.7 billion in the first eight month of the year.

* Serbia spends most on crude oil and natural gas imports, while its main export revenue comes from steel, sugar, machine parts and car tyres.

FOREIGN DEBT * Serbia’s foreign debt stood at $29.7 billion at the end of July. Private sector debt accounts for $20.3 billion and the rest is official debt to international creditors.

* Central bank statistics showed banks owed $3.7 billion and other corporates $14.5 billion in medium-to-long term debt. Banks had $1.3 billion in short-term debt and companies $728 million.


* Official hard currency reserves have been stable and were last reported in September at $13.9 billion. They stood at $14.2 billion at the end of 2007.

* Eighty percent of the reserves are in euro-denominated assets. The bank keeps 24 percent in deposits with other central banks and commercial banks with AAA or AA ratings; 72 percent in foreign securities; and 4 percent in gold, cash and special drawing rights.

* The latest reserves total covered seven months of imports. (Reporting by Gordana Filipovic; Editing by Ruth Pitchford)

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