Vučić’s economic manipulation: Is Serbia bracing for a financial crisis?

Serbian President Aleksandar Vučić has presented inaccurate data regarding the level of foreign exchange reserves held by the National Bank of Serbia (NBS), while the institution responsible has failed to react by correcting or clarifying his claims.

During a recent appearance on Serbia’s public broadcaster RTS, Vučić stated that Serbia possesses around €36 billion in foreign exchange reserves, including gold reserves.

“We have €29.367 billion in foreign exchange reserves plus 52.5 tons of gold — historically the highest reserves — worth around €6.3 billion. That means we have €36 billion in foreign exchange reserves. We can defend the exchange rate for years,” Vučić said.

However, according to official data published by the National Bank of Serbia itself, gross foreign exchange reserves at the end of November stood at approximately €29.4 billion. This figure already includes the monetary gold held by the NBS — namely 52.5 tons — which raises serious questions about the origin of the €36 billion figure cited by the Serbian president.

The economic outlet Nova Ekonomija points out that gold is already included in the €29 billion total and that the dinar is defended through market interventions aimed at preventing sharper fluctuations of the domestic currency.

“If the NBS has any objections regarding these figures, then you should ask the president,” Nova Ekonomija wrote, criticizing the central bank’s silence.

According to official data, in November the Serbian dinar depreciated nominally against the euro by 0.1 percent, while since the beginning of the year the total nominal depreciation has reached 0.3 percent. In order to maintain the relative stability of the exchange rate, the NBS has net purchased around €145 million since the start of the year.

At the same time, several economists argue that exceptionally high foreign exchange reserves are not necessarily a positive indicator, as part of those funds could be used for productive investments in the economy.

According to them, such high reserve levels make sense only if a financial crisis is expected. However, the very signal that authorities may be preparing for such scenarios can generate uncertainty and may not be reassuring for investors.