Serbia Halts Euro-Linked Debt Issue; Talks Continue
Dec. 17 (Bloomberg) -- Serbia won’t hold a Dec. 22 auction of six-month euro-linked Treasury bills and the government will revisit the “issue in the coming period,” Deputy Finance Minister Vuk Djokovic said.
“There will definitely be no auction on Dec. 22,” Djokovic said in a phone interview today. Ministry spokesman Zoran Ciric said the finance minister and the central bank governor are holding talks to “harmonize their positions” on the matter.
Branislav Toncic, the head of the Debt Management Agency told Bloomberg News yesterday the issue had been approved and that the invitation for the auction was due to be published in today’s Official Gazette.
“I was informed about the change only this morning,” he said today by phone, adding that he is “considering resigning.”
Finance Minister Diana Dragutinovic told reporters at a press conference last night “she had to accept the market reality,” when asked if Serbia would issue the euro-linked debt, without mentioning that the Dec. 22 auction had been canceled. On Dec. 10, Dragutinovic said the government would have preferred to index new debt to inflation.
The central bank wants to cut Serbia’s reliance on the euro and make the economy less susceptible to exchange-rate fluctuations and any euro-indexation isn’t “the most fortunate solution,” central bank Governor Dejan Soskic told the Serbian Chamber of Commerce today.
Reports that the government had decided to go with the euro-linked debt issue triggered the dinar’s 2.6 percent rise in four consecutive working days this week. The currency fell 1.4 percent in Belgrade today, trading at 105.80 to the euro at 4 p.m., according to Bloomberg data.
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