Governor for Večernji list:BH reserves over KM 15.4 billion, out of it three tons of gold 10/12/2021 Tweet As of 8 October 2021, Bosnia and Herzegovina, i.e., the Central Bank of BH had at its disposition 96,000 ounce (app. three tons) of gold, with the market value at the a.m. date of KM 285.15 million. This information was confirmed to us by the Governor of the Central Bank of BH, Senad Softić, Ph.D., in response to a question about the balance of foreign exchange reserves in this precious metal. Security In the context of the importance of this form of reserves, special emphasis in the answer was placed on the fact that monetary gold is considered a safe asset for which the demand is growing in conditions of uncertainty and instability; it is protected from the negative effects of inflation, so it is a form of preserving value and is considered the most reliable component of foreign exchange reserves. The Central Bank of BH emphasizes that they manage foreign exchange reserves and make decisions on investing foreign exchange reserves in accordance with the CBBH Law, internal regulations and the best international practices, and in accordance with current and expected trends in financial markets and available analyses. When it comes to total net foreign exchange reserves, they exceeded the amount of 15.4 billion marks. An insight into the Annual Report of the Central Bank of BH for 2020 shows that net foreign exchange reserves at the end of 2020 amounted to KM 13.86 billion and increased by KM 1.27 billion (10.09%) compared to the end of 2019. The growth continued this year as well, and Večernji list found out that the amount of KM 14 billion was exceeded at the end of April. Significant growth was achieved in May, June, July and August, thus the amount of net foreign exchange reserves on August 31, this year was slightly more than KM 15.4 billion. By the way, when it comes to the work of this institution last year, the Central Bank of BH states that in 2020 it fulfilled the goal defined by Law - the issuance of domestic currency according to the arrangement of the currency board. To be more precise, pursuant to the Article 31 of the CBBH Law, it is obliged to ensure that the total amount of its monetary liabilities never exceeds the equivalent amount of its net foreign currency reserves, which was completely met. In accordance with the Law on the CBBH and relevant internal acts, the Central Bank of BH manages foreign exchange reserves based primarily on the principles of security and liquidity of investments. Thus, in order to reduce the risk to the sustainability of the currency board, an Article on the CBBH Law prohibits investing more than 50% of the total not decreased capital and reserves in other currencies except the peg one. Based on this provision, the CBBH invests more than 95% of the foreign currency reserves in the EUR denominated financial instruments. Structure As for the structure of foreign exchange reserves, at the end of 2020 it consisted of term deposits with banks (excluding overnight deposits) with a share of 14.42%; liquid portfolio with a share of 34.47%; investment portfolio (securities with over a year due maturity) with a share of 49.01% and gold with a share of 2.10%. At the end of 2020, the liquid portfolio consisted of current accounts with banks (10.39% of total foreign exchange reserves); overnight deposits (2.82% of total foreign exchange reserves); cash in the CBBH vaults (1.03% of total foreign exchange reserves); IMF Special Drawing Rights (0.01% of total foreign exchange reserves) and securities with one year or less to maturity (20.22% of total foreign exchange reserves). Foreign exchange reserve management The Central Bank of BH emphasizes that they manage foreign exchange reserves and make decisions on investing foreign exchange reserves in accordance with the CBBH Law, internal regulations and best international practices, and in accordance with current and expected trends in financial markets and available analyses. In 2020, the Central Bank fulfilled the goal of issuing domestic currency in accordance with the currency board arrangement. It is obliged to ensure that the total amount of its monetary liabilities does not exceed the equivalent amount of its net foreign currency reserves, which was completely met.
