NBS foreign exchange reserves decreased by EUR 154.3 mln in the month of October, reaching on its last day EUR 9,721.2 mln or USD 13,503.7 mln. Net foreign exchange reserves, defined as foreign exchange reserves less banks’ required reserves and drawings from the IMF, equalled EUR 4,892 mln.

The ratio of foreign exchange reserves to money supply (M1) was 421.0 percent. Foreign exchange reserves covered eight months of the imports of goods and services.

Together with foreign exchange reserves of commercial banks (EUR 1,740.6 mln), the country’s overall foreign exchange reserves came to EUR 11,461.8 mln or USD 15,921.6 mln.

NBS foreign exchange reserves decreased primarily on account of interventions in the IFEM (sale of EUR 173.0 mln) and settlement of liabilities to foreign creditors (EUR 53.7 mln). In the course of October, banks allocated EUR 40.8 mln, net under FX reserve requirements.

The volume of trading in the IFEM amounted to EUR 716.4 mln, up by EUR 38.5 mln from a month earlier. In the year to October, the volume of interbank trading reached EUR 7.6 bln.

To ensure smooth functioning of the foreign exchange market and to ease excessive daily volatility of the exchange rate in October 2010, the NBS sold EUR 173 mln in the IFEM.

In the month under review, the dinar depreciated against the euro by 1.2% in nominal terms.