(Bloomberg) --
Serbia’s central bank expects its decision to cut the frequency of reporting on its interventions to increase the efficacy of its actions in the foreign-exchange market.
Seeking to copy the practice of European Union central banks, policy makers decided this year to cease reporting on interventions as they happen and will release the data monthly. The change comes in an election year in which President Aleksandar Vucic is portraying Serbia under his party’s rule as a place of prosperity and stability.
In the run up to the vote, reporting on economic activity has also changed, with the Statistics Office halting the publishing of flash estimates for economic growth. Meanwhile, the government has refrained from selling debt in the months preceding the last two elections to avoid an impact on bond yields.
The central bank, which has for years intervened in January to stem seasonal declines in the dinar, said improving macroeconomic indicators and a credit rating upgrade have also allowed it to reduce reporting frequency, according to an emailed response to questions.
“In an environment where the relative exchange rate stability and low and stable inflation, which have been maintained over the medium term, have become a new normal, the nature of the signaling effect which the National Bank of Serbia sends to market participants has also changed,” it said.
The bank bought 3.1 billion euros and sold 405 million euros in 2019. The frequency and size of interventions often serve as an indicator of a change in the key policy rate. Rate setters lowered the benchmark three times in 2019, each time after weeks of sizable buying of the euro from banks to offset dinar gains.
The central bank will hold its first rate-setting meeting of the year on Jan. 9.
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