The NBS’ foreign currency reserves fell by 3.2% m/m to EUR9.6bn at end-January, according to preliminary data of the central bank. Reserves were sufficient to finance five months of imports and covered M1 by 180%. The net forex reserves, which exclude mandatory reserves of commercial banks and other requirements, stood at EUR7.9bn and were down by EUR 61.0m m/m.
The fall in reserves in January came largely as a result of government’s net loan repayment (EUR61.3m) and adverse cross-currency changes on international financial markets (EUR141.2m). Inflows related to net sale of EUR-denominated government securities, allocation of required fx reserves on part of commercial banks, grants, interest and other grounds covered almost half of outflows based on NBS’ interventions due to forex sale.