Dinar bond in JP Morgan index in 2018 – Risk premium of Serbia at all-time minimum

A ten-year dinar-denominated bond of the Republic of Serbia will be included among the securities of the American investment bank JP Morgan in 2018, the Governor of the National Bank of Serbia (NBS), Jorgovanka Tabakovic, expects.

The expansion of the pool of investors began with JP Morgan, which included dinar bonds in the trade and bought them itself in August, thanks to which we will no longer depend on individual investors, the NBS says.

Tabakovic also said that the risk premium of Serbia had dropped to “an all-time minimum” in 2017. This year also, the risk premium of Serbia has been nearly halved and has been relatively stable since August – around 120 basis points, its lowest levels.

– In concrete terms, this means that we are able to use both local and external sources of finance under more favorable terms – she said.

She pointed out that further work on enhancing the business environment was to follow, which would, along with a high and project-diversified inflow of foreign direct investments, realization of infrastructural projects, adjustment of the monetary policy and a responsible fiscal policy, contribute to creating a basis for stepping up the economic growth on sustainable foundations in the medium term.

Tabakovic also said that the current foreign exchange rate was a reflection of the financial and the political stability Serbia had achieved and that the dinar was increasingly more in demand.

– The financial and the political stability have led to the fact that the offer of the euro exceeded the demand and that the dinar is becoming an increasingly more demanded good in the interbank foreign exchange market. The revised projection of an inflow of foreign direct investments speaks in favor of this – Tabakovic said.

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