Source: eKapija | Wednesday, 20.02.2019.| 10:12
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EBRD’s first investment in local currency bond in Serbia

(Photo: eivanov/
The EBRD has announced that it is supporting the development of the local capital market in Serbia by investing RSD 542 million (EUR 4.6 million) in a RSD 3.87 billion (EUR 33 million equivalent) local currency bond issued by Erste Bank Serbia.

This is the EBRD’s first investment in a local currency bond in the country.

The investment will contribute to the development of Serbia’s corporate bond market which is still at an early stage of development and facilitate the access of local small and medium-sized enterprises to longer term local currency financing, the EBRD says in a press release.

This is Erste Bank Serbia’s second emission of long-term RSD bonds. Following a public invitation to subscribe, the planned volume of the emission of RSD 3.5 billion was exceeded by more than 10 per cent.

The EBRD subscribed to 14% of the offer. The bonds will be listed on the Belgrade Stock Exchange. They have a two-year-plus-1-day maturity and have been placed primarily with local financial investors.

– We are pleased to support Erste Bank’s local currency bond issue. This investment confirms our strong commitment to the development of the local capital market and the use of the local currency dinar in the domestic financial system – said Zsuzsanna Hargitai, the EBRD Director for the Western Balkans.

Serbia needs stronger reforms

The EBRD believes that Serbia needs stronger reforms, as the growth is expected to slow down to 3.5% this year, according to the latest Report on Transition, presented in Belgrade today by Sergei Guriev, the EBRD's chief economist. The EBRD's analysts assess that there are still considerable fiscal risks to the Serbia economy due to large, unreformed public companies, whereas the reforms in the public sector and the Tax Administration are quite slow.

The productivity of workers in Serbia, as said during the presentation of the report, is still 20% under the EU average.

According to the report, in addition to reforms in the public sector, additional improvement of the business environment is also needed, whereas small and medium companies need better access to finance, as well as transparent rules and equal implementation.
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